Death is one of the few certainties of life. While unpleasant to think about, it’s important to prepare for. In many cases, properly preparing includes getting life insurance from one of the carriers in Massachusetts.
In its most simple form, life insurance provides death benefits to named beneficiaries. Some life policies also include an investment component.
The death benefits that a life policy pays often aren’t governed by a will. Instead, they’re distributed to the “named beneficiaries” that are listed on the policy.
A policy may have one or multiple named beneficiaries, and almost any person or organization can be listed as one. Many people list family members as named beneficiaries, but friends, businesses and nonprofits typically can also be listed. When there are multiple named beneficiaries, they’re frequently each allocated a portion of the policy’s death benefits.
A life policy’s death benefits can be used for almost any purpose so long as it’s legal. Depending on the policyholder’s desires and named beneficiary’s needs, benefits may be used to:
Businesses and organizations frequently use death benefits to compensate for a loss in revenue, hire a new essential employee or compensate fellow business owners. Nonprofits often fund projects, create scholarships, and increase endowments when benefits are donated.
Many residents of Massachusetts may want to get a life policy. Generally speaking, coverage is a wise investment whenever a person’s passing would create a financial hardship for others.
For example, parents frequently get coverage to make sure their children will be cared for if they pass away unexpectedly. Some parents also get small policies for their children, in order to help manage funeral costs if a child tragically passes away.
Sometimes, people get a life policy not to reduce a financial burden but to give a financial gift. Grandparents might get a policy to ensure that a grandchild will have the money needed to go to college, or philanthropists might get a policy that’ll donate funds to their preferred charity.
There are two main types of life policies: whole life policies and term life policies.
Whole life policies are generally meant to provide coverage throughout a policyholder's entire life. Their premiums frequently escalate with time, but they often also include an investment component that can grow over time. Eventually, the investment portion may generate enough interest to pay the premiums in full.
Term life policies usually provide coverage for a set period of time. Terms may last anywhere from a few years to several decades, and they frequently have a flat monthly premium for the duration of the policy.
Choosing a life policy is a significant decision and requires careful thought. Residents must first decide whether they want whole or term coverage, and then they need to select the amount of coverage they’d like. If getting a term policy, they also need to consider how long the term will last. After these decisions are made, policies that meet all criteria can be compared.
For help going through these decisions and comparing policies, contact the independent insurance agents at Dempsey Insurance. Our independent agents have helped many Massachusetts residents find term life insurance through our agency, in addition to holding extremely reliable whole life insurance partners. We'd be happy to help you get secured.