Life Insurance: what comes into your mind?
When you ask someone about life insurance, the first thing that comes into his mind is death benefits. This is true when you purchase New Jersey life insurance, but that is not just entirely it. Life insurance is an agreement between the insured and the insurer to protect the beneficiaries when death suddenly comes to the insured. For this to take effect, premiums must be paid regularly to cover for the benefits included in the chosen policy.There are two basic types of life insurance: term life insurance and permanent life insurance. Term life insurance refers to a policy that only covers a certain period. If the insured dies within the contract, death benefits will be issued to the beneficiaries. If the insured lives at the end of the contract, no refunds will be given – unless the insured purchases a rider. This is generally the most affordable type of life insurance because it does not build equity; therefore, no cash value. Permanent life insurance, on the other hand, covers the entire lifespan of the insured. This usually requires higher premiums, but it builds equity that provides cash value for the insured to use during emergency situations.
The pros of having life insurance
New Jersey life insurance provides dual benefits. It provides security and at the same time, savings. This is one of the best options to consider if you really want your loved ones secured. You, as the insured, shall decide what kind of life you want for your beneficiaries. But before you decide on which policy to purchase, look first at these advantages in getting life insurance:
- As Security. For one, death benefits will provide the fundamental needs of the beneficiaries to help them cope up with the loss of a loved one (the insured). If your policy builds up cash value, it can help you cover up for your life goals such as your children’s education, a new house, your dream car and your retirement even while you still live. When you die, your policy can shoulder your debts so your beneficiaries will not have to carry the burden of paying for them. In case you were diagnosed with a terminal illness, you can sell your policy to a third party at a discount in exchange for cash. This is called the Viatical Settlement. The third party will pay for the remaining premiums and get the benefits of the policy when the originally insured dies.
- As Savings. When you purchase a New Jersey life insurance, you need to pay a fixed amount regularly for the premiums. It develops your habit of saving up. Also, your money is fully secured by the insurer – these companies follow the rules and regulations of the state to protect the insured. Life insurance can also provide for your retirement fund. Some policies can pay you during your retirement that will serve as your source of income. Should an unexpected life situation arrives, you can apply for a loan as long as your policy builds up cash value. Did you know that there are tax benefits from having life insurance? Yes, the death benefits are tax-free.
When you are considering in getting New Jersey life insurance, make sure that you have discussed every detail about it with your financial advisor. It is best to know your rights and all the necessary investments to be made for your policy to take effect. After all, your family’s protection is worth prioritizing.