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The Basics of Life Insurance
Life insurance can be one of the most valuable investments a family can make. It provides your beneficiaries with a lump sum payment known as a death benefit that will assist in paying off debts, covering final expenses and supporting ongoing living costs after you pass away. In addition, life insurance could help cover medical bills related to an accident or illness that arise after death.

Your coverage needs will depend on where you are in life and who relies on you financially. Young families should have enough coverage to replace their income so their surviving spouse and children do not need to work so hard meeting daily living expenses after you pass away. As you age, it may become necessary to reassess your needs to ensure enough funds remain for funeral costs, any outstanding debts and the legacy you wish to leave behind.

There are various kinds of life insurance policies, each designed to pay out a death benefit when an insured passes away. The amount will depend on which policy and premium type is selected as well as its term (such as 10-20 years or permanent coverage). everyday life insurance as whole life and universal life include a cash value component that builds over time2, which can then be withdrawn or borrowed against.

To qualify for life insurance, it's necessary to undergo underwriting - a review of your health history and medical records - which can take anywhere from 30 minutes to several months depending on your age and health status. You will likely be asked questions about your family health history, occupation, hobbies, driving record and any other variables which could alter the risk level.

Once you pass away, your beneficiaries will receive your death benefit tax-free. It is wise to name contingent beneficiaries as well in case one of your primary beneficiaries passes before you do; that way there will still be someone receiving your death benefit payment. Claiming may be complex and lengthy so be sure to contact your insurer as soon as possible and submit all documentation related to claiming such as certified copies of your death certificate and all required paperwork as soon as possible.

Some life insurance policies offer riders that can be added at an additional cost for various circumstances, such as covering travel expenses in case of accidental death or providing disability coverage if illness prevents work. Your agent can help determine which options best suit your circumstances.
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