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Is There a Simple Definition of Life Insurance?
It All Starts with a Contract
1. Coverage in Exchange for Premiums
2. Your Beneficiaries Inherit the Money Tax-Free
3. There are TWO Main Types of Life Insurance
Term Life Insurance
Permanent Life Insurance
No simple definition of life insurance is complete without talking about permanent coverage.
Term insurance doesn’t cover you until the day you die, which poses a problem for some people. That’s where permanent life insurance comes into the equation.
If you purchase a whole life or universal policy, you are protected until your death as long as your premiums are paid promptly.
This also means your premiums are substantially more expensive than term. This is because the life insurance company WILL have to pay out death benefits.
Cash value is also typically part of a permanent life insurance policy. This is when a portion of your premiums is set aside and accumulates.
As the policyholder, you can borrow against these funds or withdraw them to use as you like. The cash value can also be left for your beneficiary. The thing is, cash value takes quite some time to build up.
Permanent life insurance is a VERY COMPLICATED product and has many variations. Buyer beware: it’s not for someone who wants to set it and forget it.
Now That You Have a Simple Definition of Life Insurance, You Need More Information to Make the Right Choice!
Why Do You Have to Be So Complicated Permanent Life Insurance?
Life Insurance Definition: Whole Life Insurance
The Truth is There’s NO Simple Definition of Life Insurance
That’s Where Policy Architects Can Help
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