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Life insurance

Just like a car or a house, your life can be insured as well. Here are some tips to help you finding the best life insurance for you.

First of all, you need to ask yourself a few questions: Do you need life insurance and why?, How much do you need? and What kind should you buy?. To know how much life insurance you need, some experts suggest to have 5 to 20 times of your yearly income. But to have a better idea of what you really need, make a list of all the payments your beneficiaries will have to do after you death. Calculate all the immediate payments (funeral, debs, estate taxes, ect.) and what you would like to provide to them (education costs, founds for special needs children, etc.). Then, calculate what resources they can count on to make all these payments. By reducing their current money ressources from your beneficiaries' future payments, you will know what is your need for life insurance.

Types of life insurance

No matter what type of life insurance you choose, the way it works is that you pay premiums, a certain amount of money for a setted period of time to a life insurance company. If you die during that period, the ones named in your policy, called beneficiaries, will get your life insurance amount. Also it’s interesting to know that they'll receive the insurance amount free of income tax.

There are some types of life insurance that provide cash benifits, which means that a portion of your premium goes into a cash reserve and to which you can have access while you're living. You can then use it to pay estate taxes, education costs, for your retirement or any other reason.

Remember that a life insurance is mostly to protect the ones you care about. Take the time to look at all the different types of life insurance available so you get the best one for you. Your life insurance should respond to your needs.

Term life insurance

It's the basic type of life insurance, which is for a limmited period of time. The costs can change depending on your age, your gender and on how long you want the term to last. The younger you are, the less you pay, and the longer your term is, the more you pay. Also, women are kown to live longer, so they pay lower rates than men.

What can be problematic with term life insurance is that even if you pay less at the beginning, your rates are usually increasing over the years.

Whole life insurance or universal life insurance

What is great with these two types of life insurance is that they are garanteed to last all your life. Compared to term life insurance, it will cost you more at the beginning, but your rates will stay permanent.

Return of Premium life insurance

Just like a term life insurance, the return of premium life insurance lasts for a limited period of time, but you pay more than ordinary life insurance. If you can keep it untill the end of the setted period of time, your money will be given back to you. This is why this type of life insurance should only be chosen if you are sure to keep your policy.

Suvivorship life insurance

With this type of insurance, the amount is paidback after the couple have both died. The survivorship life insurance covers them both, and is usually chosen to provide founds for their children with special needs if they were to die, and can be used to pay for estate taxes.. The cost is lower than an insurance covering only one person.

Where to get life insurance

You can get life insurance from an insurance company agent or from an online service. Don't be afraid to compare prices and to shop for the best life insurance for you.

Links

LifeInsure.Com: videos explanning the different life insurances

LifeInsure.com: life insurance education center

Life insurance calculater (UK)

Life insurance 101 (video)

Insurance

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