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Understanding Insurance: Education 101
Before you get insurance, education about the kinds of insurance, the coverage and associated benefits of life insurance or any other policy is advisable. Just like people ask the question of whether the chicken or egg came first, in a similar way, being able to know which comes first: a a will or life insurance policy is helpful before making end of life decisions.
That’s why insurance education is not only beneficial but necessary. The beneficiary designations you make in a life insurance policy will supersede a will. So you will want to clearly think about the life provisions you have made, who your beneficiaries are, and the benefits of life insurance before you decide.
A common question that arises regards understanding the differences among different designations. For example, people are frequently confused about the difference between a will, a power of attorney, a health-care proxy and a living will.
All of these four documents are important and there are different benefits of life insurance associated with each. While a will outlines what happens to assets upon your demise, the power of attorney, authorizes someone to take care of your bills. On the other hand, a health-care proxy designates someone to make medical decisions. A living will declares what decisions you want that person to make on your behalf or not.
