Life Insurance 101: Breakdown for Newbies

​One of the most important investments one needs to make in their life is taking out a life insurance plan. It ensures that if anything happens to you if you have dependents you’re leaving behind, they’ll be taken care of.

What is Life Insurance?
Life insurance is an agreement made between the insurance provider and policyholder to protect the latter’s beneficiaries in the event of a death. The insurer guarantees payment to listed heirs as death benefits in return for the premiums paid throughout the policyholder’s life.

Life Insurance Basics:
In most cases, financial experts believe that life insurance is the foundation of sound economic planning. Some of the benefits include:
​

1. Replace Salary for Dependents
   If beneficiaries rely on a person’s salary, life cover can supplant that income when the benefactor dies. Think of a situation where one of the parents with young kids passes on, and payment is now only from the remaining parent. Life insurance will help substitute the second income, significantly if the surviving partner’s spouse benefits are reduced. 
   
   
2. Cover Final Costs
   Life coverage can cover burial and funeral finances that don’t fall under the health cover. If there are outstanding medical bills, your life insurance may be able to help you settle those as well.
   
   
3. Make a Legacy for the Beneficiaries
   Even if you don’t own estates and businesses to pass on, you can still set up a financial inheritance that’ll benefit those you leave behind. Setting up life cover is one of those ways where you can list your dependents as beneficiaries.
   
   
4. Pay Government and State “Death” Taxes
   Life cover benefits help cover estate taxes to ensure that your beneficiaries don’t have to sell the property when you’re gone. 
   
   
5. Donate to Charity
   There’s a bigger payout by establishing a foundation or charity organization as the primary beneficiary in your life cover. That is in contrast to making individual cash donations equivalent to the policy premium.
   
   
6. Stash Some Savings Away
   Several life insurance policies set up a money value that, if not retrieved as a benefit, may be acquired or withdrawn per request. 

Conclusion
At the end of one’s life, the most incredible peace of mind comes from knowing that they lived a full life. The second is knowing that those you leave behind can continue to live their lives in your absence. An acceptable life insurance policy allows your loved ones to grieve peacefully without worrying about tomorrow.

At Klamath Insurance Center, Inc., we aim to provide comprehensive insurance policies that make your life easier. We want to help you get the insurance that fits your needs. You can get more information about our products and services by calling our agency at (541) 882-5555. Get your free quote today by CLICKING HERE.