A Crash Course into the World of the Life Insurance Policy
By Sy Alter, Chartered Life Underwriter
© 2006
The time has come for you to start thinking about purchasing life insurance and more than likely you have a few questions. Perhaps you’re not really sure what life insurance means or which type of insurance to buy. There are so many things to consider about life insurance that making the right choice might at first seem a bit complicated. But with a little knowledge, the choice won’t be so difficult.
What is Life Insurance?
Let’s begin with what a life insurance policy actually is and more important what it can do for you and your family. In brief, a life insurance policy is protection against the loss of income that would result if you unexpectedly passed away. In other words, the person who is named as your beneficiary would receive the proceeds from the life insurance policy, making sure to shield your family from any undue financial distress. In simple terms, the life insurance policy is a contract of insurance between a policyholder and a life insurance company with the policy promising to pay a specified amount of money to the beneficiary upon the death of the insured person. Life insurance protects your loved ones in case the unforeseen happens and provides some financial security for your family in the event of your death.
Life Insurance Provides Financial Security
Plain and simple, having a life insurance policy makes life more secure for your loved ones, so that they do not have to worry about funeral costs, medical bills, or what might happen if you were gone. After all, dealing with the loss of a loved one creates a great deal of emotional pain, but with a life insurance policy in place, at least the bereaved isn’t burdened with financial pressures. Instead, life insurance assures your family that there will be enough money for mortgage payments, credit card debts or potentially for college if there are youngsters. When you purchase a life insurance policy, you are assuring your family of the standard of living you would want your dependents to maintain if you were no longer there.
Reasons People Buy: Marriages, Babies, Home Purchases and More
Whether you now have insurance or are getting ready to purchase your first life insurance policy, it’s always important to assess and reassess your life as changes occur. When there is a major change such as an impending marriage, the birth of a new baby and the buying of a new home, you may want to take another look at your needs and update your policy to align with the changes occurring in your life. Because all of these life-changing events can impact heavily on your life, they should be considered when purchasing a life insurance policy. And to keep you abreast of the various terms referring to Life Insurance, as well as making sure you understand what each word or phrase means, you may want to review our Glossary of Terms so that you can easily determine what you’re dealing with when it comes to purchasing a Life Insurance policy.
About the Author:
Mr. Sy Alter is a Chartered Life Underwriter and a veteran insurance professional with more than three decades of experience in the life insurance arena. Mr. Alter specializes in areas of insurance, estate planning, buying and selling insurance, deferred compensation and corporate benefits. He maintains a solid track record of success working closely with families, doctors, lawyers and high profile individuals and businesses. Mr. Alter has also developed a lofty level of expertise providing life coverage to individuals with health impairments ranging from by-pass surgery, hepatitis, diabetes, sleep apnea as well as various types of cancers and other maladies. Mr. Alter has been guest speaker at the Financial Executives Institute as well as many other professional meetings and conferences. As Chairman of Spectrum Direct, he is available for consultations and speaking engagements and can be contacted by e-mail at salter@spectrumdirect.com or by phone at 949.600.7901.
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