|
|
Why Life Insurance is Important
|
|
|
| Life insurance is a product that enables you to manage the risk of financial loss, in the event of your death, for your loved ones or business partners. Proceeds can be used to replace lost income, transfer wealth, eliminate debt, complete a college savings plan, or address other financial goals.
|
|
|
| For small businesses, purchasing a life insurance policy on a key individual (such as an owner or top employee) can help prevent financial distress if that individual were to die.
|
|
|
How Life Insurance Works
|
|
|
| Life insurance is a vehicle for protecting your family's lifestyle in the event of your death. A life insurance policy is a contract between the issuing insurance company and the owner, that provides a death benefit to the policy's beneficiaries.
|
|
|
| Upon death of the insured, the proceeds, which are typically income tax–free1, are paid directly to the beneficiaries named by the policy owner, bypassing the delays and expenses of the probate process.
|
|
|
Types of Life Insurance
|
|
|
| There are two general categories of life insurance: term and permanent. Term insurance is purchased for a specific period of time—for example, 10 or 20 years. Permanent insurance covers an
individual until his or her death—regardless of age.
|
|
|
|
