LIFE INSURANCE FUND

Life insurance is an agreement wherein an insurance company agrees to pay a specified amount after the death of an insured party as long as the premiums are paid and up to date. This amount is called a death benefit. Policies give insured persons the assurance that their loved ones will have peace of mind and financial protection after their death.


Life insurance can help cover funeral and burial expenses, pay off lingering debts and make managing day to day living expenses less burdensome for those you leave behind. If you don't have life insurance or you do but you're unsure whether your policy is sufficient, here's how to evaluate your coverage needs.

Life insurance falls into two different categories—whole and term. Whole life policies are a type of permanent life insurance, meaning you're covered for life as long as your premiums are paid. Some permanent life policies offer an investment component that allows you to build cash value, taking the premiums you pay and investing them into the market.

Term life insurance, on the other hand, covers you for a set term. For instance, you may purchase a 20-year or 30-year policy, depending on your age and how long you need coverage. Some policies allow you to renew your coverage after a certain expiry date, while others require a medical exam to do so. Between term life and permanent life insurance, term life tends to offer cheaper premiums.

Life insurance can be a helpful financial tool to have but buying a policy doesn't make sense for everyone. If you're single and have no dependents with enough money to cover your debts as well as the expenses related to death—your funeral, estate, attorney fees, and other expenses—you may not need life insurance. The same applies if you have dependents as well as enough assets to provide for them after your death.


 

Baltimore, Maryland

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