Most people have heard of life insurance but are not completely sure what it entails. When considering purchasing life insurance, it is important to understand the potential benefits and drawbacks. With the assistance of an experienced attorney, this process does not have to be a difficult one. Continue reading to learn more about life insurance policies.
What is Life Insurance?
A life insurance policy is essentially a contract between a person and an insurance company. An insurance company provides a lump-sum payment to the individual’s beneficiaries upon their death in exchange for premium payments during their lifetime. This payment is generally known as a death benefit.
Types of Life Insurance
It is important to know that there are different types of life insurance policies available to a person. These exist in order to suit different life situations. When selecting a life insurance policy, you must consider what is best for you. Some common types of life insurance policies are as follows:
- Universal life insurance: This provides the insured individual with lifetime coverage. These policies are flexible. Sometimes, they allow you to raise or lower your premium payment or coverage amounts throughout your life. As this provides lifetime coverage, it is important to know it can come with higher premium payments than others.
- Term life insurance: This replaces lost potential income during employment years. Term life insurance may provide your beneficiaries with relief and ensure your family’s financial goals are met. However, these benefits are paid in a lump sum, not regular payments.
- Whole life insurance: This is designed to provide lifetime coverage. However, the premiums are usually higher than term life insurance. In addition to this, they are usually fixed payments with a cash value. This functions as a savings component and may accumulate tax-deferred over time. This type of insurance may be used as an estate planning tool to preserve the wealth you wish to give to your beneficiaries when you die.
When is Insurance Distributed?
A life insurance claim is usually processed in no more than 60 days from when it is filed. Typically, it is processed in 10 to 14 days as long as you ensure all the necessary documents are in place. When going through this process, it is important to hire an experienced attorney to ensure you have everything you need to receive the life insurance benefits you desire.
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Friedman Schuman is an experienced and dedicated legal resource for clients throughout Pennsylvania. We proudly serve clients facing a wide range of legal matters. If you require the services of an effective attorney, please contact Friedman Schuman today to schedule a consultation.