Life insurance is an important part of your financial planning for the simple reason that you need to make sure that you have money available to support your family in the event that you die. This is something that you have to make sure that you have if you are the primary bread winner for the family. The difficulty is making sure that you have the right kind and amount of insurance. There are a lot of things that you need to consider to make sure that you have the right coverage.
The biggest decision that you are going to need to make is whether you need whole life coverage or a term life policy. A whole life policy is a very complicated thing that serves as both protection if you and as an investment since you can borrow against the value of it. A term life policy is strictly insurance, it covers you in the event that you die for a specified period time. In the vast majority of cases I recommend that you go with a term life policy. The reason is that a whole life policy is not really a good investment and it requires you to continue paying even after you no longer need life insurance.
The other big decision that you are going to have to make is how much life insurance coverage you are going to need. The rule of thumb is that you are going to have to make sure that you are able to replace your income at least until your children have graduated from college. You will also want to make sure that there is enough money available to pay off the amount that is outstanding on your mortgage. This should be sufficient to ensure that your family are taken care of if you were to die.
One other consideration that you have to make when you are choosing a life insurance is the term that you need it for. You can get it for terms of anywhere from one year to thirty years. Again the rule of thumb is that you need to have coverage until your children have graduated from college. Of course if you still have a mortgage outstanding at this point you will want to continue coverage until that is paid off. When you are choosing a term you are going to want to go with a policy that guarantees you the right to renew your policy. This will ensure that if you need coverage for a longer time you can get it.
Once you have decided on all of the things that you need to have in your insurance policy you are going to want to shop around to make sure that you are getting the best deal. The internet has made this really easy to do and you are going to want to make sure that you take advantage of this.
Personal Finance Advice