- The main purpose of life insurance is to cover your funeral expenses when you pass away. When deciding what face amount you wish to purchase, you can also figure in any expenses you want to cover in case of your death, such as mortgage or schooling for children. Some policies allow you to treat the coverage as a type of investment as well.
- When you apply for life insurance, you will complete questionnaires about your age, health and occupation. These are the main components your premium will be based upon. It is best to purchase a policy when you are younger as the premiums will be lower.
- A policy can be left to your spouse, children or other loved ones. You can choose what percentage of coverage is paid to each individual you list on your policy.
- Term life insurance is purchased for a specific time frame, most commonly 10, 15, or 20 years. This type policy is cheaper because the insurance company feels it is less likely to have to pay a claim for you during that allotted time.
- Whole life insurance covers you from the time of purchase until you pass away. The premiums are guaranteed during that time and the policy will begin to build cash value, thus making it similar to an investment.
