Benefits of Life Insurance

When faced with the task of purchasing life insurance policies many people will struggle to decide if the benefits of the policy are worth paying the premiums every month.  Nieroda Insurance Agency can help people in the Saint Charles, MO area to better understand the basics and benefits of a life insurance policy. Their agents will assist in making the right decision for you and your intended beneficiary.  There are two basic types of life insurance and each has its own benefits. There are whole life insurance policies that cover you for your entire life whether you live to be 40 or 115; while term life insurance policies only cover you for the term of the policy which can range from one year to twenty.  

Most people see the biggest benefit of whole life insurance as the fact that these policies last the insured person’s entire life.  Whole life policy premiums don’t increase during the life of the insured.  This means that premiums, the amount of money you pay each month to keep the policy in effect, will be higher than a term life policy when you first start to pay on it. The extra premium money becomes the cash value for the policy.  The insured can borrow this money or withdraw it early.  Of course, you must repay the loan and continue to make premium payments as well.  Your beneficiary will not pay tax on the death benefit money when they receive it.  However, the beneficiary is only paid the amount of the policy.  They will not receive any cash value money there may be.  

The benefit of term life policies is that premiums are lower at the beginning of the policy.  If the insured dies within the term of the policy then their beneficiary will receive a tax free cash payout. Most insurance companies require that the potential policyholder be examined by a doctor to make sure they do not have any serious health problems.  It can be seen as a benefit that the doctor’s exam is only required in the first term.  Premiums often increase every time the policy is renewed and as the policyholder ages.  The death benefit does not increase, however, unless the policy is changed.  The higher the death benefit the higher the premiums usually.

Understanding the benefits of each type of life insurance will help you decide which is best for you and your beneficiary.  In the Saint Charles, MO area please visit the website for Nieroda Insurance Agency to begin your search for the right life insurance.