Life Quotes, Inc. Reveals 19 Things You Didn't Know Life Insurance Covered

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Jun 27, 2011, 05:30 ET

DARIEN, Ill., June 27, 2011 /PRNewswire/ -- Life insurance proceeds not only provide an immediate death benefit should you die prematurely, it can also be used to pay off a home mortgage or business loan, provide funds for your child's college tuition or to save up for retirement. There are several ways you can use the proceeds of a life insurance policy, and not all of them are immediately obvious. You may find some of the items on the following list surprising:

Medical expenses due to terminal illness: If you are diagnosed with a terminal illness, you can take out a portion of the death benefit in your insurance policy to fund medical expenses for your treatment and care. The advantage of using an existing death benefit is that your family won't be saddled with high medical bills after your death.

Children from a former marriage: If you have children from a former marriage, insurance experts stress that the income needs of the youngest children should be the highest priority because they have the longest period of dependency. Also, if you have a child with mental or physical disabilities, the length of dependency may be much longer before they become self-supporting, so this should be taken into consideration when purchasing life insurance.

Long-term care: Most life insurance policies offer the option to add a long-term care rider to the policy. If you become ill or disabled and are unable to work to support yourself, or need help with daily activities, a long-term care rider would help pay for that care. In some cases, you can purchase a rider at no additional charge, but this varies by company. Some life insurance companies impose a limit on the amount of money you can take out of the death benefit. But remember, since you are using the death benefit to pay for long-term care, this means your beneficiaries will receive less of the proceeds once you die.

Charitable donations: If you are passionate about a certain cause, you can arrange for your life insurance proceeds to be donated to your favorite local charity directly or you can add the charity as a beneficiary on your life insurance policy.

Your business partner or long-term girlfriend or boyfriend: You can add a business partner or long-term girlfriend or boyfriend as a beneficiary to a life insurance policy—if they meet a certain criteria. You must prove to the insurance company they are an "insurable interest" which would include "shared assets" as in a business partnership or if you own a home together. Also, for couples, if you intend to get married in the future this would also qualify most boyfriends or girlfriends as a beneficiary. Additionally, if you decide to change the beneficiaries on your life insurance policy after the contestability period of two years, you can typically do so without restrictions. During the contestability period the insurance company has the right to contest a claim on the death benefit, if the policyholder died within the first two years of owning the policy.

For more, see "19 Things You Didn't Know Life Insurance Covered" http://www.lifequotes.com/articles/19-things-you-didn%e2%80%99t-know-life-insurance-covered/

About Life Quotes, Inc.

Originally founded in 1984 as Quotesmith Corporation, Life Quotes, Inc. owns and operates a comprehensive consumer information service and companion insurance brokerage service that caters to the needs of self-directed insurance shoppers. Visitors to the Company's Web site www.lifequotes.com, are able to obtain free, instant car insurance quotes, instant life insurance quotes, home, business and health insurance quotes from leading insurers and have the freedom to buy online or by phone from any company shown. Life Quotes, Inc. generates revenues from receipt of industry-standard commissions, including back-end bonus commissions and volume-based contingent bonus commissions that are paid by participating insurance companies. We also generate revenues from the sale of Web site traffic and insurance leads to various third parties.

SOURCE Life Quotes, Inc.