Uses for Term Life Insurance
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Uses for Term Life Insurance
The death benefit from term life insurance goes to the beneficiary on the policy. What happens with that money is up to the beneficiary. The death benefit can be used for a whole host of financial obligations. In most cases, the beneficiary had been depending on the policyholder’s income but no longer is; now the payout can provide a measure of financial security. Common uses for a term life death benefit include:
Things To Know
- How the benefit gets used is up to the beneficiary.
- Family and dependent expenses
- Debts, including mortgages and consumer debts
- College education
- Funeral expenses for the policyholder
- Estate taxes
- Replacement income from the policyholder
- An annuity
- Expenses needed for employment or setting up a business
A person taking out a term life policy usually factors expenses like these into his or her coverage needs. An insurance underwriter then writes a policy for him or her and determines the premiums to be paid for it.