We all hear about life insurance on a daily basis. We know having life insurance is important, however, many of us do not know what it truly does, and how important it truly is. While purchasing life insurance may seem like a daunting task, with the assistance of an experienced New Jersey estate planning attorney, it does not have to be. Please continue reading and reach out to our firm to learn more about the importance of life insurance, especially in conjunction with a comprehensive estate plan. Here are some of the questions you may have:
WHAT DOES LIFE INSURANCE DO?
In a nutshell, when you purchase a life insurance policy, you are establishing a contract between you and your insurance company. In exchange for regular premium payments during your lifetime, your insurance company will provide your beneficiaries with a lump-sum payment when you pass away. This regularly referred to as the “death benefit.”
What Are the Different Types of Life Insurance Available to Me?
Different types of life insurance serve different purposes, and are for different financial situations. The three most common types of life insurance in New Jersey are as follows:
Universal life insurance: If you purchase universal life insurance, you will have lifetime coverage. These payments are comparatively flexible in that generally, you can lower or raise your premium payments or coverage amounts, however, they generally have higher premiums than term insurance.
Term life insurance: Term life insurance is generally for those who lose potential income during their working years. This will provide their families with any lost potential income in one lump-sum payment.
Whole life insurance: Whole life insurance, also known as permanent life insurance is for those who want lifetime coverage. The premiums are usually higher than term life insurance and are fixed payments with a cash value, which functions as a savings component and can accumulate, tax-deferred, over time. This type of insurance may help preserve the assets you wish to transfer to your beneficiaries, which makes it a great tool for estate planning.
When Will My Loved Ones Receive My Life Insurance Claim?
Generally, your claim will be processed within 60 days, though as long as you have all the necessary documents in order, your claim should be processed within 14 days.
Contact Our Experienced New Jersey Firm
Juan C. Velasco, Esq. is a trusted attorney who concentrates on bankruptcy, family law, real estate, and estate matters who has been serving the New Jersey area for over 20 years. That is why we are confident we have what it takes to provide you with the effective legal counsel you need. If you need experienced legal counsel, please contact Velasco Law Office and we will be happy to assist you.