Life Insurance in Garland, TX

Life insurance is a pivotal element in safeguarding the economic stability of people and their families. Should the insured individual pass away, life insurance is instrumental in compensating for the absence of earnings, settling any remaining debts and addressing the various monetary requirements of the dependents.

How Does Life Insurance Work?

Life policies are a contract between an individual and an insurer wherein the individual pays ongoing contributions called premiums. In exchange, the insurer commits to delivering a specified amount of money, referred to as the death benefit, to the individual’s heirs following their death. The primary purpose of life insurance is to offer economic protection to the insured’s beneficiaries in the event of their passing.

Various forms of life insurance exist, such as term life, whole life, universal life and variable universal life. Each has its own set of benefits, limitations and terms that should be carefully considered before selection.

How Can a Life Insurance Death Benefit Be Used?

Beneficiaries can use the death benefit from a life policy in various ways according to their needs and preferences. The following are some common uses:

• Final expenses (e.g., funeral costs and other end-of-life expenses)
• Income replacement
• Debt repayment
• Education costs
• Investment
• Legacy planning

The death benefit is typically paid out as a lump sum; however, beneficiaries may also have the option to receive payments in installments or leave the money in an interest-bearing account with the insurer. It’s important to note that while the death benefit is generally not subject to income tax, any interest earned on the retained amount would be taxable.

Learn More

Contact New Beginning Insurance Services in Garland, TX, to discuss your insurance options today.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.