Death is an inevitable end result that all living creatures will meet. When you think about the eventuality of your own death, you may have concerns about the care and welfare of your loved ones. After all, you may provide for them with your salary or other wages, and they may be dependent on your income to support their lifestyle or even to pay for basic essentials. A common way that some people prepare for the end of life is by purchasing life insurance. This type of coverage provides named beneficiaries, such as a surviving spouse or children, with cash benefits when you pass away.
There are several types of life insurance that you can purchase. One type is term coverage, and this type of insurance offers benefits for a limited period of time. Common term lengths are 15, 20 and 30 years. Another type of coverage is universal coverage. This type of insurance may offer benefits until you pass away, and it may accrue cash value over the years. This cash value may be borrowed against or even withdrawn from the policy to help you meet other financial goals or needs. Life coverage may have specific exclusions. For example, some life policies will not provide beneficiaries with benefits if the insured commits suicide. Another variation in this type of coverage relates to the benefits. When you purchase a new life policy, you can typically request a specific amount of coverage based on your loved ones’ needs and based on the premium amount that your budget can support.
Benefits from this type of coverage are often used by beneficiaries to supplement lost wages that the deceased may have been providing to the family. The cash benefits may also be used to pay off debts, and this can reduce loved ones’ overhead. Some cash benefits are also used to pay for milestone events, such as a child’s college education. These benefits can be used for any purpose without limitations, so your beneficiaries have ample freedom and flexibility to use the money in a way that is most well-suited for their needs.