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How does life insurance work?

According to a survey presented by Unum, about 40% of US adults do not have a life insurance policy. Although the names may be different, life insurance comes down to two main categories: permanent and term. Each type requires a premium that is often paid monthly.
How does life insurance work?

Permanent life insurance is a type of life insurance that is valid throughout the life of the insured person; insurance premium payments may be made in accordance with the stipulated conditions on the basis of regular monthly, quarterly, semi-annual or annual payments until the insured person dies.

Term or temporary life insurance is a policy that is valid for a certain period of time. The insurance coverage is not paid if the policyholder dies prior the insurance term or after it ends. Typical terms are 10, 20 and 30 years.

When you are ready to buy a life insurance policy, make sure that the insurance company is reliable, you should also find out how much the insurance broker commission is. Sometimes the percentage of financial experts is too high.

Life insurance

Life insurance can financially support beneficiaries after the insured’s decease. The policy can cover the mortgage, loan and funeral costs. For instance: funeral expenses in the USA usually range from $8 to $10 thousand. If you look after elderly parents, over time the additional funds will be required to pay for medical bills. You can also use life insurance to leave aт inheritance.

A person can opt out of life insurance if he does not have family members. Single people that have no children or pets fall into this category. Wealthy pensioners who have accounts and savings funds can abandon such a policy as well.

Source: https://www.usnews.com/life-insurance/how-does-life-insurance-work

Photos are from open sources.

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