Life Insurance Basics

Life insurance is available for consumers to purchase a policy to provide a cash payment to any beneficiaries named, paid at the time of death. (Also called a death benefit). Life insurance's benefits are 1) to support dependents through their lives and 2) to provide cash to cover expenses incurred upon death. If an individual does not have any minor children or dependents and they are not in bad financial shape or dependent upon you financially, then life insurance may not be required. Life insurance is purchased through policies, which require premium payments either monthly, quarterly, semi-annually or annually, and in varying dollar amounts, lengths of time and coverage. Life insurance policies would assist your dependents in covering the expenses that were caused at the time of your death and would provide them with resources through their life, if they are currently dependent upon you financially. Examples of some of the reasons for purchasing a life insurance policy include, funeral expenses, hospital bills, living expenses, mortgages and loans, estate and inheritance taxes, educational expenses and retirement funds for the surviving spouse and/or family.