Question 1

What exactly is life insurance?

Accepted Answer

Life insurance is a contract between you and an insurance company that provides financial protection to your loved ones after your death.

It ensures that they receive a lump sum payment (death benefit) to cover expenses like funeral costs, debt, and daily living expenses.

Question 2

Why would I even need life insurance?

Accepted Answer

Life insurance is essential for protecting your family’s financial future in case of unexpected death.

It provides peace of mind, knowing that your loved ones will have financial security to cover immediate expenses and long-term goals like education or mortgage payments.

Question 3

What are the different types of life insurance?

Accepted Answer

Term Life Insurance: Provides coverage for a specific period (10, 20, or 30 years) and is typically the most affordable option.

Whole Life Insurance: Offers lifelong coverage and includes an investment component called cash value that grows over time.

Universal Life Insurance: A flexible option that combines lifelong coverage with the ability to adjust premiums and death benefits.

Question 4

How much life insurance do I need?

Accepted Answer

The amount of coverage depends on your financial obligations, such as your income, debt, and dependents.

A general rule of thumb is to have 10-15 times your annual income in coverage, but all of this varies by the individual and will need to be assessed accordingly.

Question 5

Is life insurance tax-free?

Accepted Answer

In most cases, the death benefit paid out to your beneficiaries is tax-free.

However, certain policies or circumstances might lead to tax obligations.

It’s important to consult with a tax professional if you have concerns.

Josh Southern

| Helping Young Hustlers Secure Wealth & Freedom

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