While everyone hopes to live a long and happy life, the unfortunate truth is that sometimes the universe has another plan. Life insurance is designed to address these unexpected circumstances. If something happens, a life insurance policy will provide for your family after you’re gone, allowing you to protect them from financial hardship. If you don’t have coverage but have been wondering about it, here are a few facts to know about this important protection.

A Guide to the Basics of Life Insurance

1. It Offers Financial Burden Relief

In the wake of an unexpected death, it can be challenging to manage arrangements. A life insurance policy will cover expenses such as funeral costs and outstanding debt. Additionally, the coverage can replace lost income to help your family and other dependents stay on their feet. Depending on how you design the policy, coverage can also add to a child’s college fund.

2. Term & Whole-Life Are Most Common

Term coverage is taken out for a certain number of years, typically between 10 and 30. Policyholders pay the monthly premiums for the term, and if something happens to them, their beneficiaries receive a financial death benefit. Withdrawals are not permitted on this policy. Whole-life does not expire. It has a cash value, which allows the policyholder to withdraw from it after a certain period of time. Term policies are generally less expensive than whole-life because the latter offers cash value and withdrawal features.

3. Various Factors Determine Rates

If you are young and healthy when taking out a life insurance policy, the rates will generally be less expensive. Because insurance companies calculate risk and determine the likelihood of a policyholder cashing out coverage, those with clean medical histories will be less expensive to insure. Providers also look at other factors when determining premiums, such as where you live, marital status, occupation, and family medical history. Because all of these factors work together to create a policy, you may be able to find affordable coverage, even with a pre-existing condition.

For more than 40 years, Financial Strategies Group Inc. DBA Arlene Lear Insurance has helped individuals and families secure life insurance policies designed for their unique lifestyles. The Bolivar, MO-based independent firm works with several leading carriers, including Grinnell Mutual®, to offer clients affordable and customized coverage. For a free insurance quote, call (417) 777-3000 in Bolivar or (417) 754-8377 in Humansville. You can also go online to schedule an appointment.