Question : What exactly is life insurance and how does it work?
What exactly is life insurance and how does it work?I don't understand, won't you be dead or something so what does it do for you?What happens if it doesn't get cashed in, what does that mean? Sorry I don't understand, please explain.
- asked by Eruvadhron "LOE"
All Answers:
Answer #1
Life insurance isn't bought for you. It's boughtby you to give money to your heirs.If you aresingle, it can be used to pay off your debts andbury you. If you are married or have children,any extra money can be used by them to replaceyour paycheck.Many companies offer insurance forall employees, so even if you are single with nodebts, you may have $25K to $50K of coveragethrough work.
- answered by v b
Answer #2
Its not to benefit you - its to benefit yoursurvivors. Go to Yahoo Finance, click on"Personal Finance" and read the life insurancesection.
- answered by src50
Answer #3
Life insurance helps to supplement the income foryour family after you die. If you are married andboth you and you spouse work and you pass now sheis down to a single income. will your family beforced to move? will your kids be able to go tothe same schools? If you are single life policywill not only help to pay your funeral costs whichcan exceeded $10,000 you can cash out on that lifepolicy when you feel you do not need it any more. You take the money out as a loan against thepolicy which can be done tax free. however thatwill eliminate the death benefit. Talk to youragent for further info or send me an email if youhave further questions.
- answered by broken
Answer #4
Kindly Read This : - " Whole Life Insurance OneTime Payment - How Does It Work And Are There TaxPenalties ?"
http://www.flixya.com/post/GOLDCash360/805233/Whole_Life_Insurance_One_Time_Payment_-_How_.........
- answered by HaniGOLD
Answer #5
Life insurance is a bet, between you and theinsurance company, if you're going to die or not. You only "win" if you die.I'll tell you what itdoes for me. I have three kids. If I kick off,hubby will be able to hire a nanny to cook andtake care of the kids. MY life insurance, is toget my kids through school, without giving myhusband a heart attack trying to do it all.If itdoesn't get cashed in, that means, you haven'tdied. You really need to figure out what your GOALis, and sit down with a local agent who canexplain everything to you.
- answered by mbrcatz17
Answer #6
The primary purpose of life insurance is toinsulate a family from the financial burdens thataccompany the premature death of a breadwinner.The death benefit of a life insurance policyshould replace the breadwinner’s income for areasonable period of time, so the family adjust tothe loss. If the beneficiaries do not know of thepolicy, or lose it, or for some other reasoncannot "cash it in", the money stays with theinsurance company and eventually is transferred tothe state where the insured lived.
- answered by Bradley S
Answer #7
Life insurance is insurance on your life. If youdie the insurance company pays money to yourbeneficiaries. they could be family, friends, thecompany you work for even a charitableorganization. as long as there is an insurableinterest.If you are dead the money from theinsurance can pay for your funeral, your debts,mortgage, medical bills, car payments, children'scollege education, your families survival if youare no longer here to provide for them, as well aspay for inheritance taxes, probate taxes (lifeinsurance is tax free)if you are single, nofamily, no responsibilities and don't mind beingburied by the state then you probably don't needlife insurance.Lots of policies don't get cashedin or claimed, its when someone dies and theinsurance company doesn't know about it. a deathclaim has not been made, usually because thebeneficiaries didn't know the person had thepolicy. in this case the insurance company justkeeps the money until a claim is made.There arelots of different kinds of policies and it can geta little confusing. Visit your state insurancedepartments website or even talk to an agent mostwould be more than willing to help, if you don'tknow where to find one go to a place likenetquote.com or elquote.com and they'll hook youup with one
- answered by David & Elizabeth S
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