Frequently Asked Questions (FAQ)
Expert Answers to Your Life Insurance Questions
FAQs
Life Insurance Basics
Understanding the fundamentals of life insurance protection
Expert Answers to Your Life Insurance Questions
Understanding the fundamentals of life insurance protection
Life insurance is a contract between you and an insurance company that provides a death benefit to your beneficiaries upon your passing.
The main types are Term Life Insurance, which provides coverage for a specific period, and Permanent Life Insurance, which offers lifelong coverage and may include a cash value component.
A death benefit is the amount paid to your beneficiaries when you pass away, typically tax-free, and it can be used to cover expenses like funeral costs, debts, or ongoing living expenses.
The amount of coverage depends on your financial responsibilities, such as debts, income replacement needs, and future expenses like education for your children.
Generally, the death benefit is not subject to income tax, but it may be subject to estate taxes depending on your overall estate value.
Yes, if you have a permanent life insurance policy with a cash value, you can typically borrow against it, but this may reduce the death benefit.