Life insurance 101

Life insurance 101

Life insurance is a type of financial protection that provides security to your loved ones in case of your unexpected death. It is essential to understand the basic components of a life insurance policy, including the insured, beneficiary, premium, and death benefit.

The insured is the person whose life is covered under the policy, while the beneficiary is the individual, entity, or institution that receives the death benefit when the insured person passes away.

The premium is the amount of money paid regularly to keep the policy active, while the death benefit is the sum of money given to beneficiaries in the event of the insured's passing.

There are two primary types of life insurance policies to consider: permanent and term.

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              We are now at 33. Tailoredpolicy is proud of the fact that around 3.5 million lives are part of our family. It gives us a sense of immense pleasure, while we realize the
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              Permanent life insurance

              Permanent life insurance coverage lasts throughout your lifetime as long as the premiums are paid. This type of insurance can be more expensive but accumulates cash value over time, which can be borrowed against or withdrawn. On the other hand, term life insurance policies are in effect for a set period, and once the term ends, the death benefit is no longer payable. Term policies are more straightforward and cost less than permanent coverage, making them an ideal option for many.

              The amount of life insurance coverage you may need depends on your unique financial situation. It is generally calculated by identifying your long-term financial obligations and subtracting your assets. The difference represents the gap that life insurance needs to fill. Insurance premiums vary based on several factors such as the type of policy, underwriting requirements, coverage amount, term length, age, health status, and tobacco use.