Basics of Life Insurance
What is life insurance?
A policy that pays a benefit to beneficiaries after the policyholder's death.
Coverage for a specific time, like 10, 20, or 30 years.
Term life insurance.
Who should consider getting life insurance?
People with dependents, homeowners, business owners, and those with significant debts.
What does the death benefit refer to in a life insurance policy?
The lump sum payment provided to the beneficiaries upon the policyholder’s death.
What are the two main types of life insurance?
Term life and whole life.
Permanent coverage that builds cash value.
Whole life insurance.
Why is life insurance important for young families?
It ensures financial security for the family if the primary earner dies unexpectedly.
What happens if the policyholder outlives their term life policy?
The policy expires, and no death benefit is paid.
What's the main difference between term and whole?
Term is temporary; whole life lasts a lifetime.
A flexible policy allowing adjustments to premiums and benefits.
Universal life insurance.
Why would business owners consider life insurance?
To protect business partners or cover debts in case of the death of a key person.
What additional benefit might some life insurance policies offer if the policyholder is diagnosed with a terminal illness?
Accelerated Death Benefit.
What is a beneficiary?
A person who receives the payout after the insured person's death.
A life insurance that offers investment options.
Variable life insurance.
What type of individual might need life insurance to cover their mortgage?
A homeowner with dependents or a large mortgage.
What is a cash value in life insurance?
It’s an amount that accumulates over time in whole and universal life policies, which can be borrowed against or withdrawn.