Insurance Basics: Everything You Need to Know

3 Things You Probably Don't Know About Life Insurance

Investing in life insurance is perhaps one of the most responsible financial decisions you can ever make. When you are buying life insurance, you pretty much have two primary options: whole life and term life insurance. These two options are very different, but they both do provide benefits for when you pass away. While this is the common ground for both insurance types and what most people know life insurance to be, there are things about life insurance that some people are surprised to learn about altogether. Here is a look at three things you probably don't know about life insurance. 

You may be able to cash in your policy if you become chronically ill. 

In the event that you are diagnosed with a chronic illness, you may be able to get the funding from your insurance policy before you pass away. This tends to be more common with whole-life policies, but even some term life insurance policies have contingencies that offer benefit payouts before death in special circumstances. This allows you to utilize the funding for advanced funeral planning, medical expenses, or whatever you need during such a difficult time. 

You may be able to reap life insurance payments after retirement. 

With a whole life insurance policy, you can basically withdraw funds from the plan once you have carried the policy for so many years. This means that once you hit the age of retirement, you can pull out payments from your whole life insurance policy and avoid paying taxes on the money. For retirees who are living with limited financial pension plans who need a tax-free income, this is a highly desirable option to have. 

You may be able to get all your money back if you live beyond the term of the policy. 

Term life insurance policies are designed to be carried for a set number of years. These shorter term policies are most often purchased later in life by aging adults who don't expect that they will live a lot longer. If you have a term life insurance policy and live well past what you expected, you may be able to get all of your premium payments back. Some term life insurance companies offer this as an option to encourage people to take out insurance with them. Once you reach the end of your term and you are still alive, you can use that money to invest in a new policy or simply put money in your pocket. 

Contact an agency, like Advantage Insurance Agency, Inc, for more help.