Life insurance policies are rarely discussed yet entirely too important to ignore. Deciding whether or not to sign up for a life insurance plan can require time to understand policies, learn their intricacies, and shop around for the best deal.
Mark Hauser is a veteran private equity investor and fund manager with over three decades of operational experience. Along the way, Hauser has established himself as a reputable advisor and an expert in several fields.
Taking time to educate his clients, Hauser decided to dive into life insurance so his followers could better understand what they sought.
The Role of Life Insurance
Defining a life insurance plan is almost redundant because the definition is in the name. Life Insurance is insurance for a policyholder’s life, a payout to beneficiaries, and other forms of relief upon their passing.
Life insurance policies are acquired through a life insurance company, and multiple entities can hold them. An individual can insure themselves while also being insured by the corporation they work for.
Regular premiums ensure the continued activation of the life insurance policy. Some policies are signed up for life, while others are on 10, 20, and 30-year contracts. When a policyholder passes away, their policy’s “death benefit” is paid out to named beneficiaries.
What is the Living Benefit Clause
Some life insurance policies will create a supplement known as the “living benefit” clause. This clause is integral to individuals diagnosed with critical, chronic, or terminal illnesses. Qualifying policies will see a portion of their death benefit paid out while the policyholder is still alive.
Insurer Solvency Questions Addressed
While most of us don’t consider the idea of our insurance company going under, it is a genuine concern in life insurance. If an insurer were to become financially insolvent and incapable of paying out claims for death benefits, the state could step in with guaranty funds to satisfy the obligations of the policy.
What Kinds of Life Insurance Are There?
First, we must understand their key differences to find the right kind of insurance policy. Hauser briefly defined their differences below to help individuals find the right policy to fit their needs.
- Term Life Insurance – Term life insurance is a policy that only lasts for a predetermined period before expiring. The applicant will select how long the policy lasts upon submission with the potential to change to a permanent policy later down the line, tho not all policies have this option. Regular premiums keep coverage alive.
- Permanent Life Insurance – This policy pays out to beneficiaries the same as Term Life but with the caveat that there are no required renewals. Permanent life insurance coverage is more encompassing and expensive and remains in effect until the policyholder surrenders or otherwise quits paying the premium.
Take time to learn the differences that come with life insurance policies, and it will become easier to enjoy what they offer. Mark Hauser firmly believes in taking time to deliberate and become educated before making major financial decisions.