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September is Life Insurance Awareness Month

What Is Life Insurance?

At its core, it’s a contract between you and an insurance company where you give them money, and if you were to die (knock on wood), they would give the set amount of money to whomever you choose.

The Benefit of Life Insurance

The most important benefit is that you won’t be leaving your loved ones with a giant pile of debt and expenses. Think about it. Not only would they have to grieve your death, they’d also have to figure out how they’re going to pay for everything (past, present and future).

First of all, we should tell you that under the big ol’ umbrella of life insurance, you pretty much have two different flavors: perm and term.

  • Perm (also called ‘permanent’) life insurance: Just like it sounds, this lasts as long as you do. You keep paying your premiums, and it keeps going. One of the most popular forms is whole life. It offers a fixed premium from start to finish. And works like a savings account, accruing money that you can even borrow against with a loan.
  • Term life insurance: It’s kinda like yogurt. It’s really good for you, but it always comes with a firm expiration date. Here, you get life insurance for a period of time or a "term" (commonly 10, 20 or 30 years) that you decide. Your premiums are fixed for the entire length of your term. And it tends to be considerably less than permanent.

With both varieties of life insurance, when your ticket gets punched, your chosen beneficiary receives the full death benefit to handle any debt and IOUs that may have been left behind.