You may know it as a ‘will’, in legal terms though, the paper you arrange before passing on that assigns ownership of your money, property and other types of assets to family members or others is referred to as your ‘last will and testament”.
A will may have a number of important functions, including laying down your final wishes about:
• Who the executor of the terms of your will is
• Who you choose as the guardians of your minor children
• How to disburse payment for owed bills and taxes
On the other hand, life insurance is compared to a lawfully binding contract between the company issuing the policy and yourself. Unlike the will, it can shield as well as advance your current finances. Furthermore, it can take care of the monetary needs of those you love following your death – all without tax requirements. It can also pay for any tuition owed, estate taxes among other debts you leave behind. Moreover, a if included with a death or burial benefit can provide the finances to pay for your funeral, plot, headstone and related costs.
Life insurance can be divided into three different categories.
This form offers protection during the duration of a specified time span and for the most part can be converted to whole life insurance, should you decide to do so.
This form involves permanent coverage that stays with you throughout your life span. It can also be used as an investment if it builds cash value over time.
This policy is a type of whole life insurance that comes with more flexible premium payment, face amounts and non-bundled pricing structure. It can build cash value at an adjusting interest rate that will generally never go below a specific percentile.
When it comes to the big way life insurance overrides the terms of a last will and testament, pay attention: If a person leaves behind both a will and a life policy, there may be a conflict of interest when two beneficiaries are named – one as the beneficiary of the majority of the assets named on the will and the other as the beneficiary of a large insurance policy that infringes on the what the will seemingly dictates. In such a case, it is the life insurance policy that overrides the will – with monies placed into the policy given to the policy’s beneficiary.
For more on life insurance and its benefits versus that of a will, speak to the professionals at an experienced independent insurance agency.