What exactly is Life Insurance? Life insurance is simply a contract with an insurance company in which you agree to cover them a certain amount of money in return for a monthly premium. In essence, in return for your monthly premium payments, the insurer will pay out a single lump sum called a death benefit to the designated beneficiaries after your demise.

The benefit is paid out to the beneficiaries in a specified period after your passing. You and Madison Life Insurance Company determine your premium; there is no minimum coverage required. Therefore, your beneficiaries can use the money generated from the tip to do anything that they want within a specific time frame after your demise, including buying a new home or other big-ticket purchases.
There are many types of life insurance companies. Two of the most common and well-known are HMOs (Health Maintenance Organizations) and PPO’s (Preferred Provider Organizations). Both offer the same things: health care coverage and death benefits. However, one is usually more affordable and flexible than the other. One of the main differences between the two is the death benefit they establish for their policyholders. Here are a few of the key differences:
PPO’s payout the death benefit to the designated beneficiaries once the policyholder dies. If the designated beneficiary is not a family member, then the policyholder can decide not to receive any benefits at all. Most commonly, when a person dies and the insurance companies determine the payout based on the cost of living versus the expected income from life insurance proceeds, it is the family of the insured that receives the funds. However, this can vary depending on the terms and conditions of the policy. If a policyholder has a pre-existing condition, the insurance company may choose not to include that condition in the payout formula and instead opt for a different term or payout option.
HMO’s provide their policy holders with monthly premiums to pay for their coverage. Once an insured individual begins coverage, the insured individual will need to purchase a policy from the insurance company in order to continue receiving coverage. The cost of the premiums are typically based on a percentage of the insured individuals yearly income.
Policyholders can also choose to purchase a lump sum of cash in order to cover any expenses that would be paid out over a long period of time during the lifetime of the policy. Many times, this cash amount will equal the entire death benefit that would have been paid out under the Life Insurance Company policy. Premiums for this type of plan can be significantly lower than they are for permanent policies, as there are fewer life insurance company costs to be incurred. This type of plan is usually good for people who have a significant increase in expenses over a very long period of time and will need to have extra funds available for these years of service.
Permanent policies are more expensive because they do not offer any “cash-out” options. However, once the insured individual has passed away, there are often no costs involved with these types of policies. These types of policies are good for people who expect to make relatively small sums of money throughout their lives, but will need to pay a substantial amount of insurance premiums until such time that all of their money has been consumed. These policies also work well for individuals who expect to be making a substantial sum of money throughout their lives and do not want to lose any of their investments, money, or assets due to death.
A few people may have difficulty choosing the Life Insurance Company that they would like to have coverage with. Regardless of what type of coverage one is looking for, it is very important that they find the best insurance provider in the long run. If one is unable to find a life insurance coverage provider that they are happy with, they may want to look into purchasing “Term Life Insurance,” which offers basically the same benefits but is only focused on a particular amount of time. In some cases, Term Life Insurance coverage can actually be cheaper when an individual passes away due to natural causes, than when they simply choose to stop paying premiums on a permanent policy.