As explained by Allkane Insurance in Stamford, CT, life insurance refers to an agreement between the policyholder and your insurance company that enables you to leave behind some cash (death benefits) for your beneficiaries when you die. The amount your leave behind supports your beneficiaries in several ways. For instance,
- It can help them clear your debts
- Finance your funeral expenses
- It can replace lost wages or
- Sustain a family
Types of life insurance
There are different types of life insurance. They include
Term life insurance
This coverage is not only the most common type of life insurance but also the most affordable. It offers coverage for a specified duration and has fixed premiums. The policy duration can either be 10, 15, 25, or even 30.
If you pass away within the policy duration, your beneficiaries will receive death benefits. However, if you don’t die, the contract is written off.
Whole life insurance
Also called permanent life insurance, whole life insurance differs from term life insurance because it covers your entire life as long as you pay your premiums. Besides, it has a “cash value component” that allows you to withdraw or even borrow cash against it.
Universal life insurance
This refers to a special kind of whole life insurance that offers an “investment savings element” and features more affordable and flexible premium options. In some cases, the premiums can be scheduled fixed premiums or single lump-sum premiums.
Who needs life insurance?
While life insurance isn’t for everyone, you need life insurance ASAP if you:
- Own a business
- Have dependents, such as kids, a spouse or aging parents
- Have debts like mortgage, car loan, credit cards, or student loan
- Want to finance your funeral costs
According to Allkane Insurance in Stamford, CT, a life insurance policy is an absolute necessity. It minimizes risks and assures you that your financial interests will be okay even when you pass on. If you would like coverage, please contact us today for a competitive quote.