Things to Know about Life and Disability Insurance
This is a concise overview of life and disability insurance, focusing on key aspects you should know. Holbrook Insurance Center Inc. provides different types of insurance policies in Laconia, Braintree, Quincy, MA, Weymouth, Hingham, Meredith, NH, and surrounding areas.
Life Insurance
Purpose: Life insurance provides financial protection to your dependents in the event of your death. It ensures that your beneficiaries receive a lump sum payment, known as the death benefit, which can be used for expenses such as funeral costs, mortgage payments, and daily living expenses.
Types:
Term Life Insurance: Offers coverage for a specific period (e.g., 10, 20, or 30 years). If you pass away during this term, your beneficiaries receive the death benefit. It’s generally more affordable but doesn’t build cash value.
Whole Life Insurance: Provides coverage for your entire lifetime and includes a cash value component that grows over time. It’s more expensive but offers lifelong protection and potential financial benefits.
Universal Life Insurance: Combines flexible premiums with a cash value component. It allows you to adjust your coverage and premiums as needed.
Premiums: Payments can be made monthly, quarterly, or annually. Premiums vary based on factors like age, health, and the amount of coverage.
Beneficiaries: You designate beneficiaries who will receive the death benefit. This can include family members, charities, or other individuals.
Disability Insurance
Purpose: Disability insurance provides income replacement if you’re unable to work due to illness or injury. It helps cover living expenses during periods when you’re unable to earn an income.
Types:
Short-Term Disability Insurance: Covers a portion of your income for a short period, usually up to six months. It’s often offered through employers.
Long-Term Disability Insurance: Provides coverage for extended periods, sometimes until retirement age, depending on the policy. It can be purchased individually or provided through an employer.
Coverage: Typically, disability insurance covers a percentage of your salary, often between 50% and 70%. It’s important to check the policy for specific terms, waiting periods, and coverage details.
Premiums: Premiums vary based on factors like your occupation, health, and the level of coverage. Short-term policies tend to be less expensive than long-term ones.
Both life and disability insurance are essential for financial planning, offering peace of mind that your loved ones and you will be protected in unforeseen circumstances. Call us anytime if you need more information.
