If you are considering purchasing life insurance, you are most likely looking into its potential benefits and drawbacks. Insurance can seem complicated, though it does not have to. With a bit of self-education and the help of an experienced attorney, the process does not have to be a painful one. Please read on to learn more about how life insurance may benefit you.
What is life insurance?
Essentially, a life insurance policy is a contract with an insurance company. Insurance companies will provide a lump-sum payment to beneficiaries upon your death in exchange for premium payments during your lifetime. This lump-sum payment is generally known as a death benefit.
What are the different types of life insurance?
When selecting the type of life insurance that is best for you, you must consider your individual situation. Some of the most common types of life insurance are as follows:
- Universal life insurance: This type of insurance is designed to provide the insured with lifetime coverage. These policies are flexible, and, in certain cases, will allow you to raise or lower your premium payment or coverage amounts throughout your lifetime. However, since universal life insurance provides lifetime coverage, it typically comes with higher premium payments than term life insurance.
- Term life insurance: This insurance is made to replace lost potential income during working years. Term life insurance may provide your beneficiaries with a sigh of relief, as well as ensure your family’s financial goals will be met. However, though term insurance can replace lost potential income, life insurance benefits are paid in a lump sum, and not in regular payments.
- Whole life insurance: This is permanent life insurance designed to provide lifetime coverage. However, the premiums are usually higher than term life insurance, and are typically fixed payments with a cash value. This cash value functions as a savings component and may accumulate tax-deferred over time. Whole life insurance may be used as an estate planning tool, as it can help preserve the wealth you plan on transferring to your beneficiaries upon your passing.
How long does it take for life insurance to be distributed?
Generally, a life insurance claim will be processed in no more than 60 days. As long as you ensure all the necessary documents are in order, a claim is usually processed in 10 to 14 days. Hire an experienced attorney to ensure you have everything you need to receive the life insurance benefits of which you are entitled.
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.