Life Insurance

An Introduction

Not many people feel comfortable thinking about how or when they are going to pass away. Besides, why should we worry about what happens after we die anyway? It isnt like people are going to make you pay back any outstanding debts... right? The truth is the time after someone passes away can be extremely stressful, especially for beneficiaries.

The main reason for owning life insurance is to provide income replacement to your beneficiaries when you die. And perhaps make that time a little bit easier on your loved ones. Lets look at this is more detail.

Life insurance is income-protection in case you pass away, the person you name as your beneficiary will receive proceeds from an insurance company to offset lost income as a result of your death. You can think of life insurance as a very morbid way of gambling, if you live longer than the insurance company thought you would then you lose the bet. But, if you die early then you "win" because the insurance company must pay out your beneficiary.

There are literally thousands of companies across North America and the World which provide individuals with life insurance. Insurers (underwriters) look carefully at decades worth of data to try and predict exactly how long you will live for. Insurance underwriters classify individuals based on their height, weight, if you are a smoker, or if you have had any serious health complications. Your health status will determine what rate class category you fit under. Being a smoker or having had a serious health problem does not mean that you can not be insured, it just changes the premiums youll pay.

You may not think of life insurance as an investment, but it is. If you were to die, what would your spouse and dependents need in order to live comfortably? In addition to protection, what would you like to try to accomplish with life insurance?

Death is something that can be tough to prepare for, but taking proper precautions can ensure that your family remembers the good memories and not the high debt load and liabilities that you left them.