Life Insurance Basics

Although life insurance can feel like a morbid topic, we at Manteca Insurance & Financial Services in Central Valley CA know that ignoring it can cause great harm to our loved ones. To help get you started, here is a quick rundown of life insurance basics.

Life Insurance Key Terms

Life insurance is a type of insurance policy that pays cash to someone when the named person on the policy dies. The beneficiary is the person who receives the death benefits, or cash payout. The two main categories of insurance are term life insurance and whole life insurance.

Term Life Insurance

This type of insurance lasts for a set period of time and provides a payout if death occurs during that time. Its benefits are clear and straightforward, and it costs much less than whole life insurance. The downside of term life insurance compared to whole life insurance will become more apparent in the next section.

Whole Life Insurance

With whole life insurance, the policy has no end date. As long as you keep paying your premium, the provider typically has to keep honoring the policy at that rate. Most whole life policies will also build an actual cash value based on a portion of your premiums. You’ll receive that amount if the policy is ended, and you may have more options like allowing the provider to invest the value of your policy in a fund that gains interest. Some policies even increase the payout value as your policy increases in age.

The only downsides to whole life insurance are the higher premiums and stricter screening by the providers.

Learn More about Life Insurance

While this basic primer can help, even the most basic insurance questions will have answers that change based on your situation. Manteca Insurance & Financial Services in Central Valley, CA will gladly assist you with learning more about your life insurance options.