Chapter 13 Life Insurance
Who needs life insurance?
People with dependents ?
What is a Beneficiary?
Person listed in your life insurance policy to receive the benefits if you die. i would list my wife under and my children
How to determine how much life insurance you need ?
-Income Method(how much you make a year) is the formula you'd use to determine how much you need. -Budget( How much you spend a year) -incorporate living expenses, special future expenses(want to attend college) -Debt
Explain Term Life insurance
-life insurance is provided over a specified time period from 5 to 20 years -its not a investment where cash builds up its more on the bases of if you die in that term who ever is on the policy will be covered
What are Settlement options
Different ways the beneficiary can receive life insurance in case the person dies
What is the Purpose of Life insurance
Enables you to provide support for beneficiaries under you contract in case you die
what are different settlement options
Lump sum- provides all the beneficiary in a single payment Installment Payment s- will receive a stream of payments annually at the time of death of the policy holder
How should you select a life insurance company?
Specific policy you want - so if you want only 10 year term yo u choose that Relatively low insurance premiums - cost of insurance Strong financial conditions- look for rating to determine how likely they will to not go bankrupt so they provide you with the money when the time comes
Conversion
Allows you to take your Term Life insurance and change it to whole life insurance. the premium will increase but it will remain the same the rest of your life
Explain whole life insurance
Continues to provide life insurance as long as the premiums are paid this is beneficiary because it not only holds insurance in case you die but it also provides savings
What is Nonforfeiture
apart of the whole life insurance which allows you to accumulate the money you have invested if you forfeit your life insurance
Things to know on Term life Insurance
the higher your age the higher your premium will be