Life is full of unknowns, but with life insurance, you can at least rest easy knowing your loved ones will be cared for. However, insurance policies can sometimes be difficult to understand, leaving you with more questions than answers. To help, we’ve addressed some of the most frequently asked questions about life insurance.
Is life insurance necessary?
Life insurance is not always necessary. However, for the vast majority of people, at least a small policy is required. Below are just some of the things life insurance can assist with:
• Medical bills
• Funeral expenses
• Burial costs
• Mortgage balance
• College funding
• Income replacement
• General debt
Who benefits most from life insurance?
Those with dependents will likely reap the most benefits of being insured. Children, spouses and adult relatives who require care or financial assistance from you will require some financial help in the event of your death.
When should you take out a life insurance policy?
It is never too early for a life insurance policy. Many people take out such policies for their children at birth. However, if you have dependents or debt, a life insurance policy is vital. If you have neither, it is still wise to take out enough coverage for end-of-life costs.
Will life insurance cost a lot?
Compared to other types of insurance policies, life insurance is generally quite affordable. The rate you pay will be based on your age and health, so the policy will cost more as you get older or develop health problems.
Do I pay taxes on life insurance?
You do not pay taxes on life insurance. However, before the money from the policy is given to your beneficiaries, tax will be taken out. The amount taken will be determined by where you live and if the funds are forwarded to an estate or not.
Who can I name as a beneficiary?
You can name anyone as your beneficiary. In fact, you can name multiple people, charities or even just your estate. It is entirely up to you!
Will I need to take a medical exam?
In the majority of cases, yes. There are some life insurance policies that do not require a medical exam. However, they tend to cost more and offer less coverage.
If you have more questions or are ready to take out a policy, speak with an insurance broker.
Leave a Reply