There are a number of misconceptions about life insurance, especially when it comes to how it works and who needs it. For many people, it’s an important financial tool that offers the means for a secure future. If you’re considering purchasing a policy, it’s essential to know the facts so you can make an informed decision. Here the insurance agents at Taake Insurance Agency LTD in Columbia, IL, share a brief guide to this type of coverage.

What You Need to Know About Life Insurance 

How It Works 

You’ll purchase a policy that fits your needs and pay the premiums on time. In the event of your death, the insurance company will pay out your beneficiaries. Typically, the beneficiaries can receive the money all at once in a lump payment or in installments. 

There Are Two Main Types of Policies 

You can buy life insurance in either a term policy or permanent policy. You purchase term insurance for a set period. If you outlive the term of the policy, you must buy a new one if you wish to remain covered. Permanent insurance won’t ever expire. As long as you make your payments, you will have coverage for the remainder of your life. 

Life Insurance Is Not Just for Older People 

Many people believe life insurance is only for the older generation. However, if anyone depends on you to provide for them financially, you can benefit from this coverage. After you have passed, the life insurance payout will allow your loved ones to maintain the same standard of living they enjoyed while you were alive. In addition, people can use the funds to relieve the monetary hardship of funeral expenses and pay any debts you left behind. 

Factors That Affect Premium Costs

Insurance companies base your premium payments on a variety of factors. This includes age, gender, health, family medical history, hobbies, and job mortality rate. They assess each of these elements to figure out how much of a risk you are to insure before calculating costs. The higher risk you seem to be, the more you’ll pay. 

If you’re ready to take the next step and purchase life insurance, the insurance agents at Taake Insurance Agency LTD will help. They will carefully evaluate your needs so you have the right amount of protection at an affordable price. For more information about their personal and business insurance options, call (618) 281-7656, or visit their website to request a quote.