What Is Life Insurance?

Life insurance is an insurance policy which provides a payment of money upon the death of the insured. It can also be used as a way to save money or as an investment. Simply put, life-insurance provides cash your family after your death. This death benefit may be used to pay off your debts, or funeral expenses. It may also be used to pay for mortgage payments or college savings. And, there is no federal income tax on life insurance benefits. You are not required to have life insurance in the state of Oregon.

Who Receives The Life Insurance Payment?

The life insurance payout is received by the next of kin. That is, the nearest relative to the insured unless the insurance policy specifies who the payments go to.

What Are The Different Types Of Life Insurance?

Life insurance comes in 2 basic types: term life insurance and permanent insurance. Term insurance provides protection for specific period of time, and will only pay a benefit if you die during that time. For example, you may decide that you only need coverage until your mortgage is paid off. Permanent insurance provides lifelong protection. Permanent life insurance also accumulates cash value since it is designed to last a long time. Very often, permanent life insurance is used as a type of savings plan. Your financial planner can give you more assistance if you like more information on using your life insurance policy as an investment plan.