Is an asset creating financial instrument, your very own......... Will ?
This provides a lump sum of cash for a bereaved family, if the major bread earning member of the family were to pass away untimely. It also provides financial security for all their outstanding debts. Amount of death benefit is paid as a lump sum to the named beneficiary on the diseased Life Insurance Policy. Money is Tax Free and can be used for Final Expenses, Charitable Giving or as per distribution in the Will. You have the power to give your family a lump sum that you may not have earned, because of an untimely death.
Term Insurance a contract with simple coverage amount, up to a specified period of time. This has no Cash Surrender Value at cancellation, however, it shall pay the insured amount at death within the specified period stipulated in the contract. This generally ends at age 80 years or 85 years. Also called a simple life insurance contract.
Whole Life Insurance Contract a more inclusive contract having growing insurance coverage as well as cash surrender values. It can also be used for retirement income purposes as well. It is designed for Increasing the Cash Value within the Life Policy and may be fully paid off within 20 years or more, but the coverage amount lasts till the end of the individual's life. This results in the cash values increasing along with the death benefit, as the years go by. The insured becomes a Shareholder in the Life Insurance Company.
The Insurance Company provides a yearly Dividend Cheque to his Life Policy and this amount is vested and regularly added to the Cash Surrender Value of his Life Policy. This allows the cash surrender value to grow tremendously. It may be used as a retirement income plan, or as a life insurance, whatever one chooses to do.
Life insurance creates your 'willed estate', a life line, not a burden!