All about life insurance!:
I want to start this 2010 with an article about life insurance. Many people consider this subject morbid, but believe me when I say that this contract is as important as a will and should be taken as seriously as health insurance. Due to the length of the details of this article, I provided chapters for easy reading. I hope this teaches you about life insurance and the importance of your need. (Note: For a better understanding, "You" is the owner of the policy and the insured)
Chapters:
1 = Introduction
2 = When / If you already have Life Insurance
3 = Difference between an insurance agent and a broker
4 = Types of policies
5 = What are the Riders and the popular types of Riders?
6 = The medical examination
1)About general life insurance:
This is a contract between you and an insurance company to pay a certain amount (premium) to a company in exchange for a benefit (called Death Benefit, nominal amount or policy amount) to the beneficiary (the person you want to obtain ). paid at the time of his death). This can vary depending on the type of policy (which will be analyzed momentarily), your health, your hobbies, the insurance company, how much you can pay in premiums and the amount of the benefit.
Now many people can say that life insurance is like the game. You are betting that you will die at a specific time and the insurance company bets that you will not. This is a very morbid way of looking at it and if that is the case, you can say the same about health insurance, car insurance, and dental insurance. The truth is that you need life insurance to ease the burden of your death. Example 1: A married couple, both professionals who earn very well to live, have a child and like any other family have monthly expenses and 1 of the couple has a death. The chances of the spouse returning to work the next day are very low. The odds are, in fact, that your ability to perform in your career will reduce the RISK of not being able to pay expenses or having to use savings or investments to pay for these expenses, DOES NOT INCLUDE death tax and funeral expenses. This can be financially devastating. Example 2: a family of low average income, there is a death for 1 of the people who receive income. How will the family be able to maintain its current financial lifestyle?
This can be in the form of simple cash or taxes through estate planning.
Key definitions:
The Insured: The person who is covered by the insurance company (He / She DOES NOT have with the owner of the policy)
The owner (of the policy): the one who pays the premium, controls the beneficiary and basically owns the contract (NOT for the insured ... I hope you understand that it can be either).
Face amount: Also known as the death benefit. The amount to be paid to the beneficiary.
The Beneficiary: Is the person/persons/ organization that will receive the nominal amount (death benefit)
2) When / If you have life insurance:
First, you should check your beneficiaries once a year and your policy about once every 2-3 years. This is free! You must make sure that the beneficiaries are the people/people you want to be paid for! Divorce, death, a disagreement or something like that can make you change your mind about a particular person to receive the benefit, so make sure you have the right people, estate/trust, AND / OR organization (preferably without for profit) to receive the benefit. In addition, you should review every 2-3 years because many companies can offer a lower premium OR increase the benefit if you renew your policy or if you find a competitor who sees you have been paying, the premiums can compete for your business. Either way, this is something you should consider to save money or increase the amount of the policy.
3) Agent or broker of life insurance, what is the difference ?:
The main difference is that an agent is usually an independent vendor who usually works with different insurance companies to provide the client with the best possible policy while the broker works for a particular company. My personal advice: always choose an agent. Not because I am one, BUT because an agent can take care of your benefit by providing different quotes, types, additional clauses available (and
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