A Primer on Life Insurance

Simply put, life insurance can help give you peace of mind while you’re alive, and financial support for your loved ones should you pass. It’s something you should have if there are people in your life depending on you. This includes if you are providing financial support for everyday living expenses, college tuition, retirement income – or  if you’re a stay-at-home parent, and provide the family management duties which are just as important to your family’s well-being. Insure.com found that in 2024, if American mothers were paid for the work they do around the house, they would earn $140,315 annually, a 5% increase from 2023.

Here’s a quick primer or refresher on life insurance to help you understand the basics and make informed decisions about your financial future.

  • What is life insurance? Life insurance is a legally binding contract between you and an insurance company where you pay premiums in exchange for a death benefit paid upon your passing. The death benefit is a lump sum payment. 
  • How are premiums paid? Premiums are paid either as one upfront payment or as regular payments over time.
  • Who receives the death benefit? The policy’s named beneficiaries will receive the policy’s face value, or death benefit, upon death of the insured.
  • What are the types of life insurance? There are two main types of life insurance:
    • Term life insurance policies expire after a certain number of years, typically 10, 20, or 30 years. 
    • Permanent life insurance policies remain active until the insured dies, stops paying premiums, or surrenders the policy.
  • How do I choose the right policy? Do your research! When selecting a policy, factors such as your financial goals, budget, and family needs. A life insurance policy is only as good as the financial strength of the company that issues it. 

Still have questions? We know trying to understand the various aspects of financial planning can be overwhelming. Match with an Advisor For Women™ or Advisor For NextGen™ Certificate Holder to bring clarity to your financial future and receive advice tailored to your goals and needs!

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