Discover Life Insurance Basics

What Is Life Insurance Really About?

I fondly recall when I started my first job I was met at my home by a life insurance agent one evening. He was asked to come there by my mother. The young man talked sports with my brothers and myself for quite a while then we proceeded to talk business.

He never really tried to sell me anything but spent some time educating me on the uses of life insurance. I bought the policy and the agent and I have remained friends to this day. Incidentally, he is one of the most successful life insurance agents in the business to this day.

• What Is Life Insurance?

  Life insurance is a promise to pay a predetermined sum of money upon death to a named beneficiary by a life insurance carrier in consideration of a specific sum of money paid to the company at certain intervals each year.

  Life insurance is used to replace the income of the breadwinner in a family. It guarantees that the family can continue their same lifestyle. It also assures that the future plans for the spouse and children are realized.

  If there were no wives and children life insurance would not have been created. It has been described as the greatest financial instrument ever conceived by the mind of man.

• Types Of Life Insurance Companies

  There are two basic types of life insurance companies, mutual life insurance companies and stock life insurance companies. Mutual life insurance companies are owned by the policy owners and stock life insurance companies are owned by shareholders.

• Types Of Life Insurance Policies

  There are 2 basic types of life insurance policies, term life insurance policies and permanent life insurance. Term life policies offer coverage for specific periods of time; 10 years 15 years 20 years etc.

  Permanent policies are intended to be kept for the rest of your life even if that is to age 100. Permanent policies include whole life, universal life, variable universal life and variable life insurance.

  The type you buy would depend on your particular need.

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