Now You Are A Parent – Show Your Responsible Side

Now You Are A Parent – Show Your Responsible Side

While some people will argue that life insurance cannot be considered an investment, one thing is for sure – you need it especially with a growing family. A policy seeks to protect your family’s one greatest asset which is you. Coverage becomes even more crucial when you’re the only breadwinner, have existing debts, and without enough assets to settle those loans and leave enough to allow your dependents to live comfortably. Because paying for these premiums isn’t a laughing matter, policy holders are always on the look-out for ways to maximize their life insurance coverage. Here are some things to consider:

Who are your beneficiaries?
Naming your beneficiaries is a huge part of any life insurance policy regardless of what type it is. It’s one of those factors which are universal to all policies. When naming your beneficiaries, you have a couple of options. It’s possible for you to name multiple beneficiaries which would make sense should you opt to name all of your children. You may specify that every beneficiary will receive upon your death.

Contingent beneficiary is another term which you need to know about. Naming a contingent beneficiary comes in handy should your primary beneficiary die before he or she gets to receive the assets. In that case, your contingent beneficiary will be able to assume the role of the primary beneficiary. Minors may be named beneficiaries just as long as you have appointed a guardian or trustee who will be the holder of the assets in behalf of the beneficiary.

What happens when you cannot pay your premiums?
Missing a deadline on the payment of premiums is called a lapse. There are two things which your insurance company can do—it may stop providing coverage or it can provide a reduced coverage commensurate to the total premiums which you have already paid. It’s possible for holders to renew a lapsed policy.

What if you want to surrender your whole life policy?
Whole life insurance comes with a built-in cash value which will continue to earn interest for as long as you pay your monthly premiums. At any time, you can choose to surrender your policy and you’ll be able to get back your cash surrender value. However, missing payments on premiums won’t automatically strip you of coverage. Your cash surrender value may be used to pay for future premiums and grant you a commensurately reduced coverage, be used for automatic premium loan or buy term insurance which won’t require any more premiums.

Kevin Walker is a writer of many insightful articles on life insurance .

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