The loss of a loved one is never easy. In fact, it can be emotionally devastating. As if that weren’t challenging enough, it can also have a significant impact on the family's financial future. After all, without the deceased's income, it will be more difficult to pay expenses like a mortgage or a child’s education.
And, that is the primary reason why people purchase life insurance; to ensure that their families are secure financially.
Upon your death, a life insurance company promises to pay out a sum of money to those who depend on you. The premiums you pay are in return for this peace of mind. A life insurance premium can vary based on a number of factors, including age, gender, medical history, and the policy amount.
If you pass away, life insurance will provide the beneficiaries, or people you specify, with money that can be used however they like. Typically, this includes income replacement, covering essential living expenses, and paying off debts. However, it can also be used for estate taxes, medical and funeral expenses, and funding a child’s education. And, in some cases, life insurance can be used to supplement your retirement savings.