The Purpose of Life Insurance Fortuna, CA

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Life insurance Fortuna, CA is one of those things that many people don’t think they need until they need it, and by then it’s too late. Buying life insurance is an integral part of sound financial planning and room should be made for it in every American’s budget. Simply put, it is defined as an insurance policy that pays the stated beneficiaries of that policy an amount of money specified within the policy upon the death of the policy holder. The purpose of life insurance is essentially two-fold. First it is intended as a provisional substitute for the income of the insured person after he or she dies, to be utilized by the beneficiaries. Secondly, it qualifies the insured for specific tax breaks and incentives.

There are two main types of life insurance:

• Term Life Insurance involves coverage that is designated for a specific period of time and does not accumulate any cash value over the course of the stated term. It is a very rigid and directed form of life insurance as the premiums only buy financial protection in the event of the policy holder’s death.
• Permanent Life Insurance accumulates cash value throughout the life of the policy holder as long as the monthly premiums are paid when they are due. The accumulation of cash value reduces the risk to the insurance company and subsequently reduces the total cost of the insurance over time.
• Whole Life Insurance usually requires a yearly (or periodic) premium. This kind of life insurance is in effect for the entire life of the insured and does not expire after a set term.

Choosing the Right Life Insurance Policy

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Choosing the right life insurance Fortuna, CA policy is not always an easy decision. It is an extremely important life decision that impacts, for better or for worse, both the policyholder as well as the beneficiaries of a given policy. As such it is a decision that requires significant research, forethought, and consultation before being made. Things like burial expenses and lost wages are only some of the reasons why it is important to have a solid life insurance policy. The transfer of wealth and payment of estate taxes are also important reasons. A policy may be obtained from your employer, in your benefits package. But, additional life insurance Fortuna, CA is usually needed beyond what an employer might offer.

How Much Coverage Do You Need?

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Determining how much coverage you need can be very difficult, and is one of the main reasons that you need to exercise due diligence in finding a quality, reputable insurance agent, such as Heidi Olsen, who can properly assess your needs and your budget and help you choose the policy that is right for you and your loved ones. Generally speaking, it is suggested that young people in their 20s and 30s purchase a policy that is worth five to ten times the amount of their annual income. Once the policy is chosen and payment of monthly premiums has commenced, it is important not to let any unforeseen budgetary constraints allow you to miss payments and cause your policy to lapse. Be sure you have budgeted properly and chosen a policy that is affordable and does not have scores of extra “bells and whistles” that you truly don’t need. Make sure that you work with a team you can trust when you choose your life insurance Fortuna CA.

Contact Heidi Olsen today to what Life Insurance policy is best for you!