Consumer's Guide to Life Insurance
You may already own some life insurance, either through your employer's group plan,
as part of your veterans' benefits or through a policy you bought yourself. But
perhaps you think you need additional life insurance protection. If you have no
life insurance, you may be thinking of buying some. Or maybe you have questions
about the financial strength of a company. Whatever the case, this booklet can help
you make the right decisions about life insurance. It tells you how life insurance
works, describes the most popular types of policies, suggest how to decide what
policy to purchase and whom to buy it from.*
The main purpose of life insurance is to provide financial security for your family.
It helps to ensure that, when you die, your family will have the financial resources
it needs to protect their home and car and provide the income needed to run a household.
It is a contract between you and an insurance company. That contract requires that
the company pay someone you name -- your beneficiary or beneficiaries -- a certain
amount of money when you die. Your survivors can use that money as they see fit.
The money is not subject to federal or state income tax (although it may be subject
to death or estate taxes). With life insurance, you can provide a guaranteed financial
nest egg for your family's future.
* If you have some general questions about life insurance that are not answered
in this booklet, you might want to call the National Insurance Consumer Helpline
at (800) 942-4242.
NICH is a consumer information telephone service sponsored by insurance industry
trade associations. Trained personnel and licensed producers are available to answer
questions about various insurance matters, to refer consumer complaints to appropriate
sources and to send consumer brochures on request.
The Helpline operates from 8 am to 8 pm, Eastern Time, Monday through Friday.