A lot of people do not understand how life insurance works. This could be because life insurance is a broad and somewhat complex topic. This is what prompted our experts at the North Georgia Insurance Center to prepare this guide on the life insurance basics you should have understood before going to shop for life insurance in Commerce, GA.
What is Life Insurance?
This is an agreement you have with your insurer. In exchange for timely premium payments, the insurer promises to provide payments to your beneficiaries in case of your death. These payments are referred to as death benefits and they are typically income tax-free.
Why Do You Need Life Insurance?
A life policy is one of the cornerstones of smart financial planning. After your demise, the loss of income might put your family’s survival under jeopardy. By taking on this policy, its proceeds will ensure that your family has resources to not only pay for funeral expenses but to also replace the lost source of income. The policy can also be used to pay off any debts or mortgages you might have had, thus leaving your family’s assets intact. It can also be used to create an estate for your heirs.
The Main Types of Life Insurance Policies
The principal types of life policies are term-life and whole-life policies. In term-life, the insurer agrees to pay proceeds to your family if you pass away within a certain period (typically 1-30 years). If you’re still alive at the end of this period, the contract either expires or renews depending on the stipulations of your agreement. Whole-life policies protect you for as long as you live. Thus, regardless of when you pass away, your family will be reimbursed.
As stated above, a life policy is a financial plan designed to protect your family from the effects of loss of income that follow your death. It is, therefore, a necessity for anyone who has a family that depends on his/her income for their survival. Nevertheless, there are a lot more details to life insurance policies. To learn more about this coverage, visit the North Georgia Insurance Center. Having served the Commerce, GA area for close to four decades, our insurance experts will guide you on everything you need to know about this sound investment plan. Contact us here for more details.