The person who purchases a life insurance policy is known as the policyholder. They pay regular premiums to the insurance company that ensures their policies remain active throughout.
These are the individuals or entities chosen by the policyholder to receive the death benefit upon their passing. Beneficiaries are usually family members, dependents, or those with a financial interest in the insured person's well-being.
The policyholder pays regular premiums to the insurance company. The amount of the premiums and their frequency (e.g., monthly or annually) depends on the type and terms of the policy.
In the unfortunate event of the policyholder's death during the coverage period, the insurance company pays out the agreed-upon death benefit to the beneficiaries.
Income Replacement: It provides financial support to the surviving family members, helping to replace the income of the deceased.
Debt Coverage: It can be used to pay off outstanding debts, such as mortgages, loans, or credit card balances.
Funeral Expenses: It can cover the cost of funeral and burial expenses.
Estate Planning: Life insurance can be part of an estate planning strategy to ensure a smooth transfer of assets to beneficiaries.
There are different types of life insurance policies, such as term life insurance and whole life insurance, each with its own features and benefits. The choice of the type and coverage amount depends on the individual’s financial goals and needs.
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