If you were to die today, what would your family do? Would they have enough to get along?
Hard questions, I know, but we must all face these questions and it is better now than later. Life insurance is the key to your family’s ability to go on after you are no longer there. It is not the key to their happiness, but it will help them through one of the toughest times they will endure.
Life insurance is security for your family in the event that the unspeakable were to happen. In the event of the death of the insured person, a cash payment is made to a specified person called a beneficiary. The policy can be written so that the proceeds are paid to a single person or divided among several family members.
Also known as burial insurance, a portion of the cash proceeds are typically used to pay for the insured’s final expenses. The cost of the average funeral is well above the $7,000 mark. Depending on the services rendered, the cost can even reach $20,000 or more. These expenses are the responsibility of the family and need to be covered before any services are rendered by the funeral director.
Based on that set of facts, it is apparent that the insurance is actually for the ones left behind. However, having the policy in place does give the insured person some peace of mind. Knowing that their final expenses are taken care of and will not burden the family is priceless. The insured goes to their eternal rest with a clear mind.
There are two main types of burial insurance; whole life and term life. The main difference is that term life only has a death benefit and has a set term or time limit. In other words, it expires and only pays out at the time of death. Whole life builds cash value over the life of the policy and never expires. The proceeds that accrue in the whole life policy can be taken during retirement as a supplement. That cash buildup is also nontaxable