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Life Insurance

Basically, life insurance is an agreement which obligates a life insurance firm to reimburse a beneficiary on the death of the insured individual. In event that the insured individual dies, the insurance firm will pay money to the listed beneficiary. Life insurance is a tool used to give protection to the economic importance of a person's life with respect to individuals who may be depending on the person financially. Usages of life Insurance There are many uses to which life insurance can be put, both for businesses and individuals, some of the popular uses are as follows: Individual or Personal Uses: Funeral: proceeds from life insurance can ensured that there is sufficient money to take care of funeral and burial expenses of the deceased. Debt: life insurance can sufficiently covered credit card debts, personal bills, student loans, as well as personal notes on the death of an individual. Mortgage protection: The money gotten from a life insurance policy can equally be used to off-set the balance on a mortgage or alternatively provide a source of income to take care of rent payments or pay monthly mortgage Replacement of income: In case of an individual’s demise, the proceeds of a life insurance can provide additional stream of income to ensure that the decease’s remaining family members can maintain the same living standard as they are used to before the demise of the insured individual. Education: The educational cost of the insured’s children can be taken care of with the proceeds of life insurance Taxes: Both the state inheritance and Federal estate tax can be funded with the proceeds of life insurance in order to  maintain the estate’s value. Gifts/Donations: A person can use the proceeds of a life insurance can be used to finance a bequest to a charity or leave a family member a gift. Business Uses: Key / Important person: A business can be protected from any loss of profits or income it may experience due to the death of a very important employee using the proceeds of a life insurance policy. Continuation of Business: Proceeds of life insurance can be used to finance a buy/sell contract or stock recovery plan to allow a group of employees or partner buy purchased the deceased partner’s business interest. Business Loans: proceeds of life insurance coverage on a key or important business owner or employee can be used to off - set the debts incurred by the business in the events of the individual’s demise. Employees Benefit: Employees life insurance coverage is usually included in the employee benefit plans of a company. Knowing your needs There isn’t any special way out there for you to know the value of life insurance that will be adequate for you; notwithstanding, there are some factors you need to put into consideration when you are determining the value of life insurance you should have. Some of them are: Final Expenses: Final expenses could be in form of unclear medical bills, unpaid debts, expenses for funerals, probate costs, as well as inheritance and estate taxes. Readjustment Fund:  Readjustment fund can be used to mitigate the abrupt changes in lifestyle that a family needs to make upon the demise of their loved one. The family may have to move compulsorily or the surviving partner might need to get a new job. Also, an employed spouse might find it hard to get back to work instantly after the demise of their spouse. The readjustment money allows for proper mourning of the loss and eliminated the need to rush back to work.

Life insurance is a do-

it-all tool for the

wealthy

Wealthy people in the U.S. use life insurance for a variety of reasons. But guess what? You can too. It’s hard to think of an advantage that average folks might have over the ultra-wealthy. But buying life insurance may be one. For most of us, a doctor’s visit and a lifetime of affordable premiums give our loved ones some financial security upon a parent’s or spouse’s death. For high-net-worth people, more complicated finances and a riskier lifestyle can make life insurance more complex. Broker Terry Zive, who has been in the business for more than 30 years, has found it not uncommon to work on policies for $20-million or $30- million, and even $100-million. “In this market you really need to know what you are doing,” said Mr. Zive, who is president of Toronto- based Zive Financial Inc. “You not only need to understand the nuances of dealing with high-net-worth clients, but you need to understand the technical aspects of securing the coverage. If you make a mistake it can have significant repercussions.” Mr. Zive, who is usually brought in on a referral basis by a client’s lawyer or accountant, says the goal is to develop what he calls “an attractive planning structure for the client. Each plan is unique.” Insurance companies, meanwhile, are looking at more than the client’s general health. “They will want to know that you have a certain level of net worth, a certain level of income, that there will be a certain level of economic loss associated with your death,” Mr. Zive said. That means providing plenty of documentation so the insurance carrier knows that the amount of insurance being applied for is a realistic number. To  read more about life insurance for the wealthy, click the button below:
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