About Life Insurance

The answer to whether or not you need life insurance is a personal one depending on your financial, personal and other circumstances.

You can consider purchasing life insurance if you fall in one of the next categories:
•  You are married and spouse depends on your earnings.
•  You have children.
•  You have an aging parent who depends on you.
•  Your retirement savings will not be enough for your spouse to live on.
•  You have property and expect to owe estate taxes.
•  You have a business, in particular if you have a partner.
•  There is a joint financial obligation for which another person would be responsible after your death.

What kind of life insurance do I need?

There are different types of life insurance, but they usually fall into two segments: term insurance and permanent insurance. Permanent life insurance is designed to protect you throughout lifetime. It comprises two basic lines, namely whole life insurance and universal life insurance. Term life is the most popular type of life insurance policy as it suits most people's needs. You can choose a term length from one to thirty years. The company will pay benefit only if the insured dies during this specific period or term. If you have long term needs, you can opt for permanent life policy. Whole life insurance is a well-known type of permanent insurance coverage with fixed premiums.

How much coverage do you need?

There is no simple answer to this question. The financial advisors say you need enough insurance to replace 4-8 years of your income. If you have children or significant debt, you should increase the coverage to replace ten years of your salary. That means a person earning $30K dollars a year should have from 150K dollars to 300K dollars worth of coverage.