Protect Your Loved Ones and Shield Them From Uncertainties!

By: Gustavo Mcgee


The principal reason for getting a life insurance policy is so that the ones you leave behind do not suffer due to your absence. It can also pay for the increasing costs of funeral arrangements such as the casket, service, burial plot, hospital bills and any other incidentals brought about by your death. Unpaid estate taxes, debts and penalties incurred while alive, may also be covered by your policy. Life insurance also gives you peace of mind knowing that things will be taken care of when you pass on.

Your life insurance policy is money you set aside for use in the event of your death. In case of an emergency, you have the option to borrow against the policy. Be sure to pay back the loan so that it is not deducted from the payoff amount in the event of your death. When choosing a life insurance policy, keep the following in mind:

Type of insurance

Life insurances vary in definition and coverage. The types of life insurance include term life where the policy is valid for a stated period of time and paid out upon expiry of the same. This is regardless of whether the owner of the policy is dead or alive. Whole life by definition is active until the insured dies. There are others like universal and variable life and each has different stipulations and may be confusing. It is important that you seek the services of a certified financial planner (CFP) to help you decide on which policy you should take.

How much you need

Objectively analyze your debts, the relative costs of funeral arrangements and your family's monthly expenses to determine how much life insurance to take. Also, take out a policy whose premiums you can afford to pay. Consult your CFP on these matters as they are emotionally charged and may impede your judgment.

Beneficiary information

You can take out a life insurance policy for yourself and elect a beneficiary of your choice. You can also take out life insurance policy on someone else and pay the premiums such that in the event of their death, the payout goes to you.

Certain provisions such as revocation of beneficiary status must be taken into account. In some instances, divorce may be grounds for revocation of a life insurance policy since most divorces do not end amicably. Suicide is automatic grounds for voiding a life insurance policy and so is murder by the intended beneficiary. Be sure to review your life insurance policy periodically with regard to beneficiaries in case you would like to add or remove them.

Remember, your life insurance policy will be revoked if you stop paying your premiums. Make sure your payments are not only regular but on time because once revoked, you lose the money you had put in up until you defaulted. When taking out an insurance policy, answer all questions provided by the insurer honestly to the best of your knowledge. Once discovered, false information provided by you may cause your insurance contract to be voided.

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Insurance is always a prudent choice to make, especially when you are thinking about Knoxville retirement planning. Visit Capital Financial Group for more relevant advice!

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