It seems that the internet is full with life insurance offers and quotes. If you search for life insurance, you get almost a billion hits. Eight hundred and thirty million, to be exact, but at first glance, all you see is quotes, quotes and more quotes. You’ve probably come across our own website because you are looking for a quote. But why do you need the life insurance and what are the benefits?
Generally speaking, life insurance was originally intended to provide funding for funeral costs and to help the surviving loved ones bridge the financial gap that the untimely demise of the insured person incurred. While this may seem macabre and cold, it did and does reflect a real problem and provides a solution.
Unfortunately there are many situations where a working parent passes away at a relatively young age and the family is suddenly left without any income and with funeral costs to bear. A life insurance policy provides them funds for the funeral costs and most of the time there is plenty of money left over for the rest of the family to cope with the financial repercussions of such a disaster.
But nowadays life insurance can be much more than just the aforementioned. For instance, people use the life insurance policy as collateral in a mortgage situation, where, in case the person that took out the mortgage dies, the life insurance policy covers the remaining debt, so the survivors do not have to leave their home. Additionally, there is also a life insurance version, where the policy holder does not have to die before the benefits are reaped. This is a mixed insurance which provides a life insurance in case the policy holder dies, but in case that the same manages to survive to a certain age, the policy holder can either receive a lump sum or monthly payments for as long as he or she lives.
There are other life insurance versions as well, like the popular “critical illness” cover, where the benefits can be used, i. e. the funds, if the policy holder is struck by any of the conditions that are being covered, under the terminally ill definition. Very often the death benefits for the survivors remain unscathed by the critical illness benefits use, to explain it better, the hospital charges during the prolonged illness are covered as well as the funeral costs afterwards.