paying for it.
your life insurance premiums work much like your auto insurance. you’ll pick a coverage amount (death benefit), and the insurance company will determine your rate. the rate is how much you’ll pay each month for the policy (premium). it is determined by several factors: gender, age, health status, and some others, even your personal activities. there is flexibility on paying the premiums depending on the type of policy but monthly and annual are common.
many policies today will provide you with a couple of add ons that let you customize the policy. these are called riders. child riders will let you get a small amount of life insurance on your children. some will waive your premiums from being due if you become disabled. others would give you the option to tap into the death benefit early if you became sick, disabled, or otherwise needed some extended care. others will let you select how the benefit is paid out (more on that below). these benefits are intended to let you build a policy that best fits your needs but you’ll want to be clear on the details. like any other product, adding any of these options may come at a cost and increase your monthly premium.
the most common method is a lump sum. which is potentially great for recipients
because beneficiaries gain flexibility in planning with one large check. if you’d feel more comfortable leaving a large sum of in a planned duration, there are installment payouts as well. with this selection, your beneficiaries will receive partial payments monthly or annually for the duration of time established through your policy’s contract.
life insurance payouts are tax free.
disclosure: the ideas, thoughts, and opinions in this article are our own, except where sources are specifically cited, and are property of millennial financial planning. this article is intended for informational purposes only, and does not serve as direct financial advice. speak with your financial professional for direct advice and guidance. all investments contain risk and the potential loss of principal.
"mfp. does not sell life insurance.”