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Life Insurance and How Does it Work?

February is known as “Insure Your Love” month according to Life Happens, which is a non-profit organization whose mission is educating the public about life insurance. “People want to protect their loved ones, and one of the best ways to do that financially is with life insurance.”

What is life insurance?

The death benefit can be used to pay for expenses like funeral costs, debts, help replace lost income, a mortgage, college tuition and more.

How does life insurance work?

1. Verify whether you need life insurance coverage.

2. Calculate how much life insurance coverage you need. (

3. Determine what type of life insurance best meets your financial needs. (Whole, Term, Universal)

4. Purchase life insurance whether it is directly with a life insurance company or with an independent agent. (

5. Choose your beneficiary and tell them about your life insurance policy.

How does life insurance pay out?

When the insured under the life insurance policy dies, a family member, or designated administrator, needs to contact their insurance agent or insurance company to put in a claim. A copy of the death certificate and the life insurance policy number will be required.

Once the claim is submitted, the designated individuals or entities can generally expect to hear back from the insurance company with further instruction and on when the funds will be distributed.


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