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Young FamilyWhen a person buys life insurance, they're not doing it for their own benefit. He or she is doing it to provide for his or her family. As the name would imply, life insurance pays a benefit when a person dies. The benefit is paid to the beneficiary, who is the person(s) selected by the policyholder.

Life insurance can be approached from two directions. First, there is term life insurance. With this type of policy, the insured person pays a premium for a term of 10 to 30 years — or maybe longer, depending on their health and age.

There are several types of term life insurance. Some types will include annual increases in the premium, and others will not. Furthermore, there are often options for paying monthly, quarterly, semiannual or annual premiums.

When the period of time for paying premiums on the term life policy concludes, the coverage ends. There is no benefit paid at the end of a term life policy if the insured person has not died. This is why term insurance is less expensive than whole life insurance. There are policies that provide for the return of premiums, where a portion or the entire premium is repaid. However, there are restrictions and the premiums are higher.

A person may choose to take out a term policy for several reasons, including providing enough money to pay off the mortgage on the house, assure funds for a child's college education or support a family if a parent dies. Term insurance is not an investment that will grow in value, but it can provide protection for an extended period.

On the other hand, whole life insurance can be viewed in two ways. First, it offers a death benefit, just as term life insurance does. If someone has a policy and dies, the beneficiary will receive a monetary benefit. However, when the term of the whole life policy is completed, meaning no more payments are necessary, the coverage continues until the person does die. Whole life policies also earn interest, which can accumulate and is paid when the benefit is paid.

Thus, the whole life policy is an investment tool. It should not be looked upon as a way of saving for retirement. It should be viewed as a way of helping a spouse, children or others with the benefit that is paid upon the death of the insured person.

Some policies will allow for the withdrawal of the interest as it is earned and accumulates. Depending on the company, some whole life policies have options that will provide premium payments if the insured person is disabled or provide the option to increase the coverage. This may be accomplished through the issuance of a supplemental policy. Again, each company has its own methods.

Many companies offer term life insurance to their employees, and the premium is relatively low. There are usually options to increase coverage while the person is employed. This is good supplemental coverage, but there are two things to remember.

First, when you leave the company, you may or may not have the right to continue the coverage. Secondly, if you can continue it, the coverage converts from a group policy where the employer pays part of the premium to an individual policy where the insured person pays the entire amount.

Insurance is important for a person with a family, aging parents or other people that might be in need of assistance. People buy life insurance to ensure that their loved ones will have some financial support when they do die.

Protect your family's future. Call TCU Insurance Agency at (800) 772-8043 more information on Indiana life insurance.
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