Life Insurance

 

Life insurance is an insurance form in which a person makes regular payments to an insurance company, in return for a sum of money to be paid to them after a certain period of time, or to their family when they die.

 

The life insurance policy’s death benefit is usually tax-free. Within a trust, wealthy individuals sometimes buy permanent life insurance to help pay the property taxes that will be due upon death. This strategy help its families to preserve the value of the estate.

 

Whole Life Insurance

 

Whole life insurance is a type of permanent life insurance that accumulates cash value. It provides cover for an insured’s life. Whole life insurance also includes an investment portion in which cash value will accumulate in addition to paying a death benefit. Often known as “permanent” or “traditional” life insurance plans.

 

This is different from term life insurance, typically available only for a number of years, rather than a lifetime, and only pays a death benefit.

 

How Much Life Insurance to Buy

 

Before applying for life insurance, you should analyze your financial situation and determine how much money would be required to maintain the standard of living of your beneficiaries or meet the need you are purchasing a policy for. Re-evaluating your life insurance needs annually or after significant events in life, such as divorce, marriage, a child’s birth or adoption, or a major purchase such as a house, is important. You might need to update recipients of the policy, increase coverage or even reduce coverage.