One of the more common ways an individual can begin planning for their future is by purchasing a life insurance policy. Life insurance is set up similar to how other insurance policies are as you are required to make payments toward a premium, usually monthly, in exchange for benefits. Most of the insurance policies you have now are there to provide you with benefits when you need them, however, life insurance is designed to provide financial protection to the people you name as your beneficiaries. This is usually a spouse, a child, etc.
Life insurance benefits, which typically come in the form of a lump-sum payment, are paid out at the time of the insured’s death. It is important for those who purchase a life insurance policy to include it in their estate plan so that their beneficiaries are provided with the money they are due at the time of their loved one’s death. Although life insurance is a great way to give your loved ones the financial protection they might need after you’re gone, it can also be used to tie up any loose financial ends (i.e. debt).
If you choose to use money from your life insurance policy as opposed to using other assets to settle any unpaid debt at the time of your death, you are going to want to include instructions for this in your estate plan. Don’t have an estate plan yet? Not a problem. The Coral Springs, FL estate planning lawyers at Express Law are available to help you begin working on yours.
Common Types of Life Insurance Policies
Some of the more common types of life insurance policies you can purchase include:
- Term Life Insurance
Term life insurance is “designed to provide financial protection for a specific period of time, such as 10 or 20 years.” Your premium payment would stay the same for the coverage period you select and once that is up, “policies may offer continued coverage, usually at a substantially higher premium payment rate.” Term life insurance can help cover lost income (i.e. the money you would have contributed to your family had you still been around and working) or “ensure the family’s financial goals will still be met.”
- Universal Life Insurance
Universal life insurance is designed to provide your beneficiaries with lifetime coverage. Premium payments are usually higher for this type of coverage, but the policies are “flexible.”
- Whole Life Insurance
Fidelity says that “whole life insurance is a type of permanent life insurance designed to provide lifetime coverage.” Policy premium payments are usually fixed and are higher than term policies.
Life insurance is one of several tools that can be used to pass down money to those you love and care about. If you recently purchased a life insurance policy and haven’t updated your estate plan to include it, the Florida estate planning attorneys at Express Law would be happy to help you do this. In the event you haven’t started working on your estate plan, now would be a good time to contact a Coral Springs, FL estate planning lawyer.
Express Law can be reached at:
2900 West Sample Road
Pompano Beach, FL 33073
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