Life insurance protects the economic value of a human life against death, a loss that is certain to occur but at an uncertain time. Benefits are paid to beneficiaries, people or institutions that the policy owner designates.
The occurrence of death immediately creates the need for funds to pay final expenses – funeral costs and medical expenses incurred at the end of life. In addition, and greater than these, may be other ongoing expenses for which family members could be responsible when a loved one dies. There may be mortgage payments, tuition and school expenses, and repayment of debt among many other possible expenses for which beneficiaries may be responsible.
When choosing to buy life insurance, people balance the amount of insurance they feel they need to cover anticipated expenses with the amount of premium they feel they can afford. When a life insurance policy is issued, it immediately creates a source of funds that is much larger than the premium amount. It makes sense to pay a calculated smaller amount periodically in order to provide an adequate benefit exactly when it is needed to pay expenses incurred at death. The initial and ongoing payment of life insurance premiums can bring peace of mind through knowing that loved ones will be able to more easily pay expenses and maintain a suitable standard of living.
There is no better time like the present to protect what matters most.