| Life insurance is a means for providing financial | | | | age. Life insurance is most often used to provide |
| protection for your family in the event of your death. A | | | | income protection to the spouse of the deceased. |
| life insurance contract is relatively straightforward; you | | | | Regardless of the reason for buying the insurance, the |
| agree to pay a premium at regular intervals, and the | | | | owner (if not the same person as the insured), must |
| insurance company agrees to pay a certain sum of | | | | have an insurable interest. In other words, the owner of |
| money to your beneficiary upon your death. | | | | the contract must have a reason for wanting to insure |
| There are three parties to a life insurance contract. | | | | the life of that person, otherwise the contract is void. |
| First, there is the insured. This is the person whose life | | | | When the person covered by the policy dies, the |
| is being insured under the policy. Next, there is the | | | | insurance company requires proof of death before |
| insurer. The insurer is the insurance company who | | | | paying the claim. A notarized death certificate is the |
| underwrites the risk. And third, there is the owner. The | | | | most commonly accepted form of proof. The benefit |
| owner and insured are not necessarily one and the | | | | is paid out either as a lump sum or as an annuity that is |
| same. Someone can buy a life insurance policy to | | | | paid out over time. |
| insure the life of someone else, such as their spouse. | | | | Any annuity can be a good way to receive the |
| The person who buys the policy is the owner, and the | | | | benefits. It is possible for the beneficiary to set up a |
| person whose life the policy is based on is the insured. | | | | lifetime annuity, which would guarantee that person a |
| When the owner and the insured are different people, | | | | certain amount of monthly income for the rest of his or |
| premium payments are the responsibility of the owner. | | | | her life. |
| Every life insurance contract also has a beneficiary. | | | | There are two basic types of life insurance, temporary |
| This is the person who receives the proceeds from | | | | and permanent. Temporary insurance is known as |
| the policy in the event of the death of the insured, and | | | | term life. An example of a term policy would be a |
| is assigned by the owner. There are two types. An | | | | 20-year term life, which means that the policy will pay |
| irrevocable beneficiary can not be changed unless the | | | | a death benefit if the person dies within the next |
| beneficiary gives his or her permission; if it is revocable, | | | | twenty years. |
| the owner can change it at any time. | | | | Permanent insurance includes whole life and universal |
| The policy is subject to certain terms and conditions. | | | | life. Whole life provides for a payout no matter when |
| There are usually certain exclusions that apply, | | | | the person dies, but premiums have to continue to be |
| depending on the person being insured. But with almost | | | | paid, usually right up until the insured reaches the age |
| every policy, death as the result of suicide during the | | | | of 100. Universal policies are somewhat similar, but they |
| first two years of the policy term is excluded from | | | | allow for greater premium flexibility. Universal insurance |
| coverage. | | | | is somewhat complicated; you should talk to an agent |
| Also, during the first two years of the policy, often | | | | before buying it. |
| referred to as the contestable period, the insurance | | | | I hope this information has helped you become |
| company retains the right to not immediately pay out, | | | | acquainted with life insurance. You should sit down |
| even if the death is caused by a condition that is | | | | with your spouse and talk about buying a policy. Then, |
| covered in the policy. The company can order an | | | | call an agent who works for an insurance company |
| investigation into the death of the insured, to make | | | | with a strong financial rating and make an appointment |
| sure that the death was not deliberate or the result of | | | | to discuss your objectives. Use the information that |
| homicide. | | | | was presented here to help you make intelligent |
| The amount paid to the beneficiary is called the face | | | | choices so your family will be protected in the event |
| amount. The maturity date is reached upon either the | | | | that something happens to you. |
| date when the insured deceases or reaches a certain | | | | |