Life Insurance

What is life insurance? Life insurance should be call death insurance, because it is an insurance policy that pays a lump sum death benefit at the time of the insurers death. You can get life insurance from several life insurance companies and through work. Life insurance you buy individually is different from insurance at work, which is typically referred to as group life insurance. Typically group life insurance is cheaper, but when you leave your company, you don't have it anymore, however more and more companies are making their life insurance portable.
If you buy life insurance individually from a life insurance company, you control the policy. There are several types of life insurance, but the main categories are TERM ( ie temporary) or PERMANENT, which typically has cash value.
Term= renting an apt, as long as you pay your premiums you are covered for a certain amount of time
Permanent= Owning a home and building equity by having cash value in your policy

What type of insurance you should purchase depends on how much you can afford, as permanent insurance is more expensive, but it does pay out more often than your term insurance. I'll get into the differences in later posts....
Should YOU have life insurance? The answer is yes, if the following applies:
1) Someone else depends on you for income, i.e. your spouse or kids and they would not be able to continue their lifestyle if your income disappeared
2) You have liabilities that you don't want to leave behind for loved ones
3) You have an estate that is subject to estate taxes that you would like to minimize

Sit down with your loved ones and discuss if you should look into it, and then get with an insurance agent to see what type is best for you, or email me askmisspenny@gmail.com

PS Did you know life insurance proceeds are TAX FREE?