Human life is subject to risks of disability, accident, death, and retirement. When you cannot earn money due to retirement or an accident, there is a loss of income. In such circumstances, your family would need financial help to survive. This is why buying a life insurance policy is important, as it can provide financial support in the event of your demise, accident, or retirement.
What Does Life Insurance Pay For?
The death benefit is the amount guaranteed by the insurance company to the beneficiaries mentioned in the insurance policy. This amount would help the people who are financially dependent on you after your death. For the majority of policies, the death benefit is based on factors such as age and health.
The cash value refers to the actual amount of life insurance. This money can also be used as a loan to protect you and your family, but it can be expensive, as you have to pay interest. If there is an outstanding balance on these loans, the insurance company reduces the death benefit accordingly.
Do You Have to Pay for Life Insurance?
Yes, you will have to pay for life insurance coverage in the form of premiums. A premium refers to the regular payment towards your policy. The premium amount may increase for people with high health risks, larger death benefits, and a policy with accumulated cash value.
Some insurance companies offer significantly lower premium prices for the same policy, so it’s good to explore different companies before purchasing insurance. Review your finances and loans to find out how much coverage you need and select your life insurance policy accordingly.
A life insurance policy would financially protect your family even after your death. However, figuring out which policy to buy can be difficult. Contact our experts at East End Insurance Agency for assistance. We will help you choose the right coverage that suits your requirements.