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Life insurance is for people who feel they have
at least some responsibility for those who depend on you. This maybe
just enough to cover funeral costs, but could extend to paying off
all debt, and even big payouts around $1,000,000 are not uncommon.
Term Life Insurance - insurance that
covers the insured for a specified period such as one, five, or 10
years, often with an option to renew. Premiums are paid throughout
this time, but generally become higher during the course of the
term, as the policyholder grows older, and thus closer to death.
Permanent Life Insurance - life insurance
coverage for which the policyholder pays an annual premium,
generally for the life of the insured. This type of policy features
a savings component, known as the cash surrender value.
Whole Life Insurance - life insurance
that remains in force during the insured's entire lifetime, provided
premiums are paid as specified in the policy. Whole life insurance
also builds a savings element (called the cash value) as a result of
the level premium approach to funding the death.
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