Life Insurance Basics – What Should You Consider?

Identifying how much life insurance coverage you need is an important first step in the process. Generally, you’ll want to make sure that your policy amount is enough to cover any outstanding debts and help meet your family’s long-term financial goals, like paying for college tuition. Consider all sources of income, including Social Security benefits and retirement funds, when determining how much life insurance coverage you need.

Once you’ve determined how much life insurance coverage you need, it’s important to consider your budget and affordability. A life insurance policy can provide a financial safety net for your family if you die or become disabled. But the overall cost of a policy—including premiums and any fees associated with it—should fit into your budget. It’s important to find a policy that fits both your needs and your wallet.

For life insurance, there are two main types of policies you can consider-term life insurance and permanent life insurance. Each type of policy offers different advantages, benefits, and features. Term life insurance offers coverage for a predetermined period of time—usually five, 10, or even 30 years. Permanent life insurance is designed to provide lifelong coverage as long as the premiums are paid. There are also other types of life insurance policies you may want to explore including whole life and universal life policies. Understanding the differences between these various types of policies is essential when choosing a plan that is right for you.