Life insurance

         Today, I have been working on my financial planning portfolio for American Research and Management. As part of the portfolio I will be including life insurance. Today I spent the time researching the different options available. There are two types of life insurance term life insurance and permanent life insurance.

            Term life insurance is the most responsibly priced and is designed to only cover a person for a certain amount of time. The term could be 10, 20 or 30 years. This would suit someone who has other financial needs such as a mortgage or a child’s tuition to pay for. Each year a premium is to be paid to cover the risk of death during that year. Term life insurance has no cash value. The only way to collect anything is to die before the term life insurance expires. If death does occur, then the life insurance beneficiary will collect the death benefit of the life insurance policy, free of income tax.

            Permanent life insurance provides lifelong protection. This insurance will never end as long as the premium gets paid. It also provides a savings element that accumulates a cash value over a long period of time.

The other types of life insurance are:

·      Child life insurance

·      Accidental death insurance

·      Disability insurance

·      Final expense insurance

·      No medical exam life insurance

·      Long Term Care insurance

·      Critical illness insurance

·      Life insurance Riders

Life insurance is income replacement. The life insurance policyholder pays a premium, (monthly, quarterly, semi-annually or annually) in return for a life insurance company to promise to pay the death benefit, or face amount to the named beneficiary. It helps those that are left behind be able to be taken care of financially.

A client will need life insurance if someone depends on them financially. This could be:

Married with no children: They share financial obligations, so both spouses should have their own life insurance. If one was the die the other could cover shared expenses. It is also better for a couple to buy life insurance before they get pregnant in case there is birthing complications.

Married with children: Those with children should be left enough to have their living expenses, college tuition and marriage paid for.

Single parent: for a parent who singling is the primary caregiver, breadwinner, cook, chauffer, entertainer etc. they should defiantly take out a policy.

Stay-at-home parent: They make large financial contributions to the families like childcare, transportation, cleaning, cooking and household management which would all cost money if they weren’t there.