Learn the Basics of Life Insurance

Life insurance is a crucial component of any financial plan, but it's also often overlooked. This can be especially true for young people who are just starting out in their careers, but who still have a lot of life ahead of them. It can help protect you and your loved ones from unexpected expenses along the way.  So, let's take a look at what life insurance is and how it works!

Types of life insurance

There are many types of life insurance, and it can be hard to know which one is best for you. Here are some things to consider:

Are you getting term or permanent coverage?

Do you need coverage for just yourself or your family as well?

Are there any special circumstances that might make certain types more cost-effective than others?

Term life insurance

Term life insurance is a contract between you and an insurance company. The monthly premium you pay for term life coverage goes toward paying off the cost of your death benefit, which is the amount set aside for your beneficiaries if something happens to you. If you die during the term, they will receive this payout; if not, they won't get anything back from their investment in your policy (and neither will you).

However: If someone else has taken out a policy on their own life with another company and dies before that contract expires, then those policies usually have clauses stating that any remaining payments are paid out proportionally among all beneficiaries named on both policies' declarations pages--so even though one person may have been insured twice by two different companies (and therefore received double payments), each beneficiary gets some money back!

Traditional whole life insurance

Traditional whole life insurance is a permanent policy that has a death benefit. It builds cash value over time and can be used for any purpose, including paying off debt or buying a house. The policy is guaranteed renewable, which means you can keep the same amount of coverage even if your health changes over time.

Universal life insurance

Universal life insurance is a hybrid of term and whole life insurance. It offers flexibility, making it useful as both a savings vehicle and protection against unexpected events. However, it's not recommended for younger people or those who want to protect their families in case of death (the latter being the main purpose of life insurance).

Universal life policies are best suited for those who want to save money while still having access to some coverage if something happens unexpectedly. This makes them great options for people who want some protection but don't want to commit themselves entirely through term or whole policies

Life insurance is a crucial, but often overlooked part of your financial plan.

Life insurance is a crucial, but often overlooked part of your financial plan. It can help protect your family from the financial burden of your death and provide them with a source of income in the event that you pass away. Life insurance also provides an opportunity to pass on some of your hard-earned savings for future generations through annuities or charitable giving.

Life insurance can be used to pay off debts and cover funeral costs, as well as ensure that any beneficiaries will receive the proceeds quickly so they can take care of their own needs without having to wait for probate court proceedings or other legal processes.

Do you want insurance throughout your life with a fixed cost, a whole-life policy might be the best choice. Want to be able to vary how much you pay into the policy depending on your budget each month, a universal life policy could be a good choice then. Or if you want to combine life insurance with your investing acumen, a variable life policy might be the right fit. It all depends on you and your needs and objectives.

Conclusion

The bottom line is that life insurance is one of the most important parts of your financial plan. It can help protect your family's future and provide peace of mind in case something happens to you. The key is to make sure that you understand the different kinds of life insurance available before making any decisions about purchasing coverage.

If you need further assistance on how to get your life insurance please click here for more information.  

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About the author 

Jack Marbida is a husband to his wife Wene and a father of 2 little boys Isaac and Israel, he is a financial advisor, speaker, and writer who helps families be financially stable and grow their relationships. He works with families to help them reach their goals by teaching them about financial literacy and helping them develop a healthy relationship with money.

He has been featured in Sun Life Financials and others for his work as a financial coach. He is also the founder of Online Advisors Financial Education, which provides free educational content through blogs and videos.

Jack speaks at conferences across the Philippines on topics such as family finances, and personal and professional growth.  

You can contact Jack Marbida through his social media accounts or email him at papajackph@gmail.com.

Cheers!