Life Insurance

1. Life insurance protects those who depend on your earnings.

It provides your dependents with ongoing income to replace yours (replacement income) until they can live without it. It can also can provide emergency costs for medical, legal, and funeral costs, should your family not be able to afford it. It is, basically, a way to provide for your family should you pass away unexpectedly.

2. There are two main types of life insurance plans.

Term insurance is a type of policy that covers you for a specific period of time. It is usually much less expensive than other types. Whole life insurance covers you for your whole life, so long as you continue to pay an annual premium. This coverage also accumulates value, which you can take as cash or use to increase the value of the plan itself. It is much more expensive, and if the premiums weren't locked in at a lower rate when the policyholder was younger, the premium will increase dramatically each year the policyholder gets older.

3. Life insurance replacement calculations factor in all of your family's needs.

Replacement income calculations do not factor in immediate family costs (funeral costs, legal costs, the potential for uninsured medical costs, etc), debt payments outside your monthly budget, or possible current employment benefits (health insurance, etc). Because of this, it is important to factor these costs into your coverage. Many experts recommend carrying a whole life insurance policy worth 5-10 times your annual salary. At 10 times your annual salary, the beneficiary can receive a lump sum that they can invest at 10% per year and live the same lifestyle off the interest earned.

4. Before committing to a whole life insurance policy, it is best to compare quotes from top rated companies.

Each kind of policy has benefits and drawbacks. Obtaining quotes from several different companies can help you find term coverage or whole life insurance coverage for your family. Number of years working, number of children, savings accounts, investments, years to retirement, mortgages and annual income all play into figuring out how much should be invested into coverage.

5. The early church provided a form of life insurance for orphans and widows.

James 1:27 - Pure religion and undefiled before God and the Father is this, To visit the fatherless and widows in their affliction, and to keep himself unspotted from the world.

Mortgage Life Insurances

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