What You Need to Know About Life Insurance and Estate Planning

What You Need to Know About Life Insurance and Estate Planning

Life insurance is something that everybody should invest in. There are many benefits to having life insurance, and though it may seem complicated to obtain, have no fear–with the help of a knowledgeable Maryland estate planning attorney, you can learn everything you need to know about life insurance in Maryland. Please continue reading and give our firm a call to learn more. Here are some of the questions you may have:

What is life insurance?

Life insurance policies are contracts with insurance companies. When you purchase a life insurance policy, the insurance company will provide your beneficiaries with a lump-sum payment upon your passing, in exchange for regular premium payments while you are alive. The lump-sum payment is frequently referred to as a “death benefit.”

Are there different types of life insurance?

Generally, there are three main types of life insurance, which is why it is so critical you pick the type of insurance that is best for your personal situation. The three most common types of life insurance are as follows:

  • Universal life insurance: Universal life insurance provides the insured individual with lifetime coverage. That being said, generally, universal life insurance policies are rather flexible, meaning in many cases, you can actually raise or lower your premium payment or coverage amounts at various points in your life. That being said, these generally come with higher premium payments than term life insurance.
  • Term life insurance: Many people who lose potential income during working years will turn to term life insurance for relief. This type of insurance can replace lost income, however, the benefits are paid in one lump-sum, as opposed to regular payments.
  • Whole life insurance: Whole life insurance is permanent life insurance, and it is designed to provide lifetime coverage. That being said, the premiums are generally higher than term life insurance, and are typically fixed payments with a cash value. The cash value works as a savings component, and may accumulate tax-deferred over time. Whole life insurance can help preserve the wealth you plan on transferring to your beneficiaries upon your passing, thus making it quite a useful estate planning tool.

When will life insurance be distributed?

In most cases, a life insurance claim can be processed within 60 days. However, for it to be processed sooner, rather than later, is it always best you first ensure you have all the necessary documents are in order. As long as you do, the claim should be processed within 14 days. For any additional questions, reach out to our knowledgeable Montgomery County estate planning attorneys today.

Contact our experienced Maryland firm

The attorneys at JD Katz have years of experience compassionately guiding clients in Maryland through the estate planning and administration process. Our firm also has experience with matters of elder law, business law, tax law, and litigation. For a legal team that will put your needs first, contact JD Katz today.

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