What Is Life Insurance?
Life insurance is an insurance policy where a specific amount is paid when the insured person dies. It is usually obtained by people as a way to save money or as an investment. In simply words, the insurance company provides your family with cash after your death. This cash can be used to pay off your debts, or to pay for the funeral expenses. It can also be used for the payment of mortgage or college savings. Also, no federal income tax is charged on life insurance benefits. It is not necessary for one to have life insurance in the state of Colorado.
Who Get The Life Insurance Payment?
The specified amount is received by the next of kin, who basically is the nearest relative to the insured person until and unless the insurance policy identifies who the payments go to.
What Are The Various Kinds Of Life Insurance?
The two basic types of life insurance are: term life insurance and permanent insurance. The basic provisions of term insurance are that it provides protection for a particular period of time, and the benefit will be paid only if you die within that particular period of time. For instance, you may obtain the policy just till mortgage is paid off. Permanent insurance on the other hand provides life time protection. Permanent life insurance also hoards cash value since it is intended to last a long time. In a number of cases, permanent life insurance is taken up as a kind of saving plan. The best way to gain information about using your life insurance as an investment plan is through your financial planner.
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