Breaking Down Life Insurance

Planning for the future can be difficult at times. Understanding life insurance and which one is best for your family’s future financial needs may be puzzling. In this article, we break down the principal types of life insurance NC and explain the basics that one would need to know before making any decisions. Contacting a life insurance agent at Alexander Financial is always encouraged to provide additional information. 

What is life insurance and how does it work 

Life insurance is a contract between you and your insurance company that provides you with coverage based upon premium payments. Life insurance provides a death benefit to your selected beneficiary (typically a spouse) upon your death. When you pass, your beneficiary will contact an insurance agent to file proof (a death certificate) of your passing and will be instructed to complete other necessary paperwork. Once the insurance company receives all the essential documents, your chosen beneficiary will be issued the death benefit payout. 

Types of life insurance

Life insurance can either be temporary/term or permanent/whole life. The most obvious difference between the two is the duration of the policy. In term insurance, policies are issued for a pre-determined number of years, while permanent policies pay a death benefit whenever you die, no matter how old. 

Term

• Will pay your beneficiary only if you die during the term of an active policy
• Typically the lowest prices because you are likely to outlive the policy
• Designed to protect your dependents in case you die prematurely
• Premium and policy payouts stay the same throughout the term

Selecting this option is great for when you have younger children or large outstanding bills such as a mortgage. The term can be selected to end around the time your children are no longer dependant, your house is paid off, and plenty of money in savings in case of emergencies.

Permanent

• Provides lifelong coverage and includes an investment component with little to no taxes
• Can borrow money against the policy, but if not paid back there are deductions from your death benefit
• The death benefit and premium remains the same level your entire life, not just the duration of the term 

This option of life insurance is beneficial when you want a death benefit and a cash value. This cash value allows you to borrow against your policy, or cancel your policy for a lump sum amount of money which is the accrued cash value. There are multiple types of permanent life insurance NC policies, which enable you to select the most effective one for you and your family’s future. 

Alexander Financial Services

Want to know more about the different life insurance NC options available to you through Alexander Financial Services? We want to help you find the right kind of life insurance for your needs. Every client of ours is different, and we work diligently to ensure they are covered properly.

Schedule your appointment to talk with us, and we will work with you to pick out the life insurance premium that works best for you and your family.