Life insurance

Life insurance is available to anyone in order to secure and provide for those who are dependent on them, in case of death.  Thus it is not so much life insurance as death insurance.  By purchasing life insurance you will have the ease of knowing that when you die, those who depend on you for income will be protected and taken care of.

If you do not support any one else, you do not need to purchase life insurance.  However, other possible reasons you might consider purchasing life insurance are if you have a large amount of debt or you would like to give your money as a gift to a particular charity. 

Term Life Insurance: Upon death, the beneficiaries automatically receive the entire value of the policy, if the policy holder dies within the paid term.  The value of the policy does not increase over time, but is a fixed value of insurance for a set number of years.  After the term is expired, the insurance is no longer valid. However, in some cases it can be renewed or converted to a whole life insurance policy.

Whole Life Insurance:  Consists of a constant face value, as well as a growing savings account.  This type of life insurance offers a fixed premium amount throughout the life of the policy.  This policy guarantees an accumulation of cash value.  Whole life insurance can be purchased to cover the entire life with limited premium payments, reduced premiums for a limited time period, or as one lump-sum payment.  The type of whole insurance you get usually depends on your income, age, and stage in life.

Things to keep in mind:

• Life insurance premiums usually increase with age: there is no way of getting around it.  If you are a greater death risk, the insurance company wants proper compensation.
• Premiums differ between genders.  It is a known fact that females generally live longer than males.  This being the case, females will usually get a lower premium.
• The amount of life insurance should be sufficient to replace your existing income.  This should be taken into consideration, along with both inflation and taxes, to determine how much life insurance you should purchase.   There is no need to be cheap, and not purchase enough.  However, there is also no need to over-purchase.