Local 1001 Insurance Center

Life insurance is the core of sound financial planning. It becomes an important and vital tool when people face financial constraints in the absent of core family member. If you are the cornerstone of your family and they live depending on your income, life insurance policies can replace such income when you leave the family. This coverage best suits for children who lost parents. It also suits for couples wherein the survivor will be financially stricken by income lost by the death of the partner.

When a permanent life insurance policy lapses, most insurance companies switch its status from permanent insurance to one of two options:

"Extended term": The insurance company uses the cash value of the policy to buy a term life insurance policy for the same death benefit using the cash value of the policy. The death benefit will continue for the longest period the cash value will purchase.

"Reduced paid up": The insurance company will keep the policy in force permanently, but will reduce the death benefit.

Most insurers will not offer a policy to someone who is undergoing treatment for cancer. Depending on your type of cancer, the life insurer may also want to add a surcharge, also called a temporary flat extra. For example, one insurance company sometimes charges temporary flat extras for two to five years, depending on the applicant's cancer and treatment. The good news is that although these extra life insurance premiums can be expensive, they will automatically disappear after a set period of time.