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Prepare For Your Family's Future With Life Insurance

It is just natural to not want to think about the time when you will not be there to help provide for your family. Unfortunately, because death is inevitable, everyone needs to plan for their passing and how their will provide their family with the funds they need to live comfortably even after you are gone. Just imagine what life would be like if your spouse and your children were forced to live without your income. This is a scenario you do not want to think about and that does not have to happen with the proper planning. This planning involves purchasing life insurance that will pay your beneficiaries in the event of your passing. Find out what types of life insurance products are available and what you need to consider when you are purchasing your policy so that you have the peace of mind you need to enjoy the time you have with your family instead of worrying.

Choosing the Right Type of Life Insurance Policy

When you are shopping for life insurance, you will quickly discover that insurance comes in two different types: term insurance and permanent insurance. While both of these policies are designed to provide your beneficiaries with the money they need to replace your income, they are very different. Here is a brief description of each type of policy so that you can educate yourself before you start requesting life insurance quotes:

Term Insurance:

Term life insurance is often referred to as renting as opposed to buying. When you buy a term life insurance policy, the policy is rated at your current age and you will pay level premiums for the entire duration of the term. Term plans are available in a number of different lengths of time from the one year term, to the more popular 30 year term. Term insurance offers the greatest amount of coverage for the lowest premiums. If you choose a short term, you will pay lower premiums than you would if you selected a longer term. The policy will remain in force for as long the term lasts. In most cases, you will also have the option to renew your term at your current age when the term is up.

Permanent Insurance:

Permanent life insurance is considered the equivalent of buying versus renting. When you purchase a permanent insurance policy, you are anticipating a long-term need for coverage that will not expire by a specific date. Permanent life insurance policies will stay in force for the remainder of the policyholder's life, as long as the premiums are current. Unlike term insurance, permanent insurance plans will earn cash values that will accumulate over time. These values can be withdrawn, borrowed against, or they will be added to the death benefit. While these policies are great for a long-term need, they can be as much as four to ten times higher in price than a term plan.

How Much Life Insurance Do You Need?

Now that you have decided on which type of life insurance plan you want, you need to determine how much coverage you need. The entire purpose of life insurance is to provide financial security. You have to consider your income, your debt, how many children you have, the value of your assets, and your lifestyle when you are buying a policy. Generally speaking, you should have between 5 and 10 times your current annual income in life insurance. You will need to consider your own individual factors to truly determine how much coverage you want to provide to your family and how much coverage you can actually afford.

Make sure that you take time to sit down with a licensed life agent to discuss all of your options. Prepare in advance and have peace of mind in knowing you have taken time to prepare for your family's financial future when you take time to apply for and purchase life insurance.