Defining Important Life Insurance Terms

Are you in the process of shopping for life insurance policies, but having issues deciding which type of coverage is right for you? Buying an adequate life insurance policy with the right amount of coverage is crucial in protecting your loved ones and having the peace of mind that they will be protected when you are no longer with them and your final expenses are taken care of, however, obtaining the right policy can be tricky due to the complicated market phrases. If you are located in the area of San Diego, California, and have questions about life insurance, Windfall Insurance Services, Inc. is here to help. Read on to learn more about the meaning of important insurance terms to help you make the best decision about your policy.

Understanding How Life Insurance Works

Life insurance pays a “death benefit” to a policyholder’s benefactors when they die and that policyholder makes life insurance premium payments while they are still living. Essentially, a life insurance policy will cover the life of the insured individual while they make insurance payments to the provider, and that company then pays an allotted amount to the policyholder’s beneficiaries who are listed on the insurance policy. Life insurance typically covers a natural or incidental death, and in some cases, a policy will even cover a living benefit that can be paid out to the policyholder while they are still living and have been diagnosed with a terminal illness.

Important Life Insurance Terms To Know When Deciding On A Policy

As you decide on the type of life insurance policy to purchase, understanding what the following terms mean will help you make the most suitable choice for your situation.

● Premium – A premium is the payment that a policyholder makes to an insurance carrier for the life insurance benefits that it provides.

● Policyholder – The policyholder is the person who owns the life insurance policy and pays the insurance premiums.

● Beneficiary – A beneficiary is someone named by the policyholder to receive a death benefit when the policyholder passes away.

● Death benefit – A death benefit is the amount of money that is paid to a designated beneficiary when a life insurance policyholder passes away.

● Final Expenses – Final expenses refer to the services and items that are associated with the death of the policyholder, such as funeral expenses, medical bills, etc.

● Term Life Insurance – This insurance type covers a person for a specific period of time, usually between 1 to 30 years. It is intended to cover someone during their working years and does not pay out after the specified insurance term ends and can help cover short term needs like paying off a mortgage or other debt.

● Permanent Life Insurance – This covers long term needs and offers protection for life.

If you are located in San Diego, California, and are trying to determine what life insurance policy to get, contact Windfall Insurance Services Inc. today for a consultation.