Life Insurance provides protection against the loss of income that would result if the insured passed away. Life Insurance policies will have a named beneficiary (or named beneficiaries). The named beneficiary receives the proceeds and is safeguarded from the financial impact of the death of the insured.
The primary goal of life insurance is to provide some financial security for your family after you die. It is important before purchasing a life insurance policy to consider your financial situation and the standard of living you want to maintain for your dependents.
Some important questions that you should ask are:
- Who will be responsible for the funeral costs and final medical bills?
- Would your family or dependents have to relocate?
- Will there be adequate funds for future or ongoing expenses?
It is wise to re-evaluate your life insurance policies annually or when you experience a major life event.
Life Insurance coverage is also used to lessen the financial blow to a business that would occur when a corporate officer or key partner where to die.