Question:

What exactly is life insurance and how does it work?

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What exactly is life insurance and how does it work?

I don't understand, won't you be dead or something so what does it do for you?

What happens if it doesn't get cashed in, what does that mean?

Sorry I don't understand, please explain.

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  1. Life insurance isn't bought for you.  It's bought by you to give money to your heirs.

    If you are single, it can be used to pay off your debts and bury you.  If you are married or have children, any extra money can be used by them to replace your paycheck.

    Many companies offer insurance for all employees, so even if you are single with no debts, you may have $25K to $50K of coverage through work.


  2. Life insurance is insurance on your life. If you die the insurance company pays money to your beneficiaries. they could be family, friends, the company you work for even a charitable organization.  as long as there is an insurable interest.

    If you are dead the money from the insurance can pay for your funeral, your debts, mortgage, medical bills, car payments, children's college education, your families survival if you are no longer here to provide for them, as well as pay for inheritance taxes, probate taxes (life insurance is tax free)

    if you are single, no family, no responsibilities and don't mind being buried by the state then you probably don't need life insurance.

    Lots of policies don't get cashed in or claimed,  its when someone dies and the insurance company doesn't know about it.  a death claim has not been made, usually because the beneficiaries didn't know the person had the policy. in this case the insurance company just keeps the money until a claim is made.

    There are lots of different kinds of policies and it can get a little confusing.  Visit your state insurance departments website or even talk to an agent most would be more than willing to help, if you don't know where to find one go to a place like netquote.com or elquote.com and they'll hook you up with one

  3. Life insurance helps to supplement the income for your family after you die. If you are married and both you and you spouse work and you pass now she is down to a single income.  will your family be forced to move? will your kids be able to go to the same schools? If you are single life policy will not only help to pay your funeral costs which can exceeded $10,000 you can cash out on that life policy when you feel you do not need it any more.  You take the money out as a loan against the policy which can be done tax free. however that will eliminate the death benefit.  Talk to your agent for further info or send me an email if you have further questions.

  4. Kindly Read This : - " Whole Life Insurance One Time

    Payment - How Does It Work And Are There Tax Penalties ? "

    http://www.flixya.com/post/GOLDCash360/8...

    ...

  5. Its not to benefit you - its to benefit your survivors.  Go to Yahoo Finance, click on "Personal Finance" and read the life insurance section.

  6. Life insurance is a bet, between you and the insurance company, if you're going to die or not.  You only "win" if you die.

    I'll tell you what it does for me.  I have three kids.  If I kick off, hubby will be able to hire a nanny to cook and take care of the kids.  MY life insurance, is to get my kids through school, without giving my husband a heart attack trying to do it all.

    If it doesn't get cashed in, that means, you haven't died.

    You really need to figure out what your GOAL is, and sit down with a local agent who can explain everything to you.

  7. The primary purpose of life insurance is to insulate a family from the financial burdens that accompany the premature death of a breadwinner. The death benefit of a life insurance policy should replace the breadwinner’s income for a reasonable period of time, so the family adjust to the loss. If the beneficiaries do not know of the policy, or lose it, or for some other reason cannot "cash it in", the money stays with the insurance company and eventually is transferred to the state where the insured lived.

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