When considering life insurance, buy only what you need to meet your families needs if you should die.
Look at term insurance - for most people it's the best option.
Shop around! You can payless by comparing offers from several companies.
Who Receives The Policy?
When you buy a life insurance policy, in addition to choosing one or more beneficiaries to receive for proceeds when you die, you will also designate an owner for the policy.
Whatever type of life insurance you decide to buy, shop around. Premiums for the same cover surprisingly vary widely. Figure out how much coverage you want and get quotes from several companies. Within an hour or so you'll be able to track down a good deal and save a pretty penny.
As you probably know, life insurance is a financial product that provides a payment (known as a benefit) when you die. The association with death makes many people feel there is something scary about life insurance. Some people refuse to buy life insurance because they feel they are worth more dead than alive.
The truth is, not everyone needs life insurance. The whole point, as with any form of insurance, is to protect you and those you care about from financial loss. If there is no one who would be financially harmed by your death, then life insurance is probably unnecessary. Therefore, if you are single and have no children or other dependence, you may as well bypassed life insurance.
However, if you are married or in a committed relationship; if you have a child; or if you have a mortgage or other significant obligations, then you probably need life insurance.
How Much Life Insurance? And What Kind?
Let's start with the first question. How much life insurance do you need?
Some people - especially insurance salespeople - will suggest "one size fits all". For example, they offer the rule of thumb that everyone ought to have insurance coverage equal to 15 times their annual salary. That would amount to a whopping $750,000 if you earn $50 ,000 per year. But a slightly more analytical approach may be better.
If you are responsible for paying a mortgage, begin by assuming that you need life insurance coverage equal to the outstanding amount of your mortgage debt. This way, if you die, your spouse or loved one will be able to pay off the mortgage in full, despite the fact that you will no longer be around to contribute to the payments. This is known as mortgage life insurance. Without this coverage, it might be impossible for your surviving spouse or partner to make the payments and the home might have to be sold.