Let's Talk About Life (Insurance)
Life insurance provides protection against the sudden death of a loved one, family breadwinner, business partner, or to guarantee a loan.
Life insurance can also be used as a savings vehicle that can be used to fund retirement, or college education; salary continuation programs for business executives, private retirement plans for key employees, and also for those “rainy days” needs.
The Low Down
Life insurance is a contract between a policyowner and the insurance company, or carrier. This company/carrier provides the insurance on the life of the insured individual. The person owning the life insurance policy is referred to as the policyowner. Although the person insured under the life insurance policy is usually the policyowner, an insured and a policyowner may be different persons.*
More Interesting (and Useful)
Life insurance is a unique tool to create wealth. It does so by assuring a desired amount of liquid capital is paid upon the insured’s death, even if that death occurs immediately after the coverage becomes effective. Depending on the insurance plan, life insurance can also provide funds during the insured’s lifetime; these funds are usually referred to as living benefits. Living benefits can enable the policyowner to take advantage of other opportunities, such as having funds for a down payment on a vacation home or to meet emergencies. Many life insurance policies also provide accelerated death benefits that are payable to a terminally ill insured during his or her lifetime.
A primary use of life insurance is to replace the future income that is lost when someone dies. With personal life insurance, an insured is often the person who produces income for the family. However, people may also buy life insurance on the lives of family members who do not work outside the home, such as a stay-at-home spouse who raises the children. Regardless of whether the insured is the primary wage earner or someone else, the insurance company pays a specified amount—called the policy’s face amount or death benefit—normally free of income tax. This amount is paid to the beneficiary upon the insured’s death while the policy is in force.
Because many types of life insurance are available, a consumer must learn the basics about the various kinds to make an informed choice. Life insurance policies differ in the following areas:
- premium level
- duration of premium payments
- potential for cash value gain
- risk management
Life Insurance Quotes in San Diego
Contact your local, San Diego health and life insurance agent today to explore your options, and protect you, your business partners, or your loved ones.
*A policyowner can be a person other than the insured in a business insurance situation when the business owns the life insurance policy; the insured and policyowner may also be different in an estate planning case where an adult child or an irrevocable trust is the owner of the policy insuring the life of the insured.