It seems like a simple question that could be answered easily in just a few words. However, life insurance is not just one single entity. It covers a wide range of products and comes in many types and forms. It is important to acquire an understanding of what life insurance is and how it applies to different people and different situations. Once you have that, you can make an informed decision about which type is the right one for you and your family.
At its most basic level, life insurance provides a cash benefit to your heirs upon your death. This money is not subject to income taxes and can be used in any way it is needed. Properly configured, life insurance can provide your family with financial protection long after you are unable to do so. Your life insurance requirements will vary according to your situation and stage of life. Fortunately, there are a variety of policies available to meet your current and future needs.
"Life Insurance Made Simple" is an excellent tutorial available on the Kiplinger's Personal Finance website. It offers comprehensive information to assist you in learning just how your needs change with each new stage of your life.
Your life insurance needs progress as you age. They start out with a smaller need when you are very young, growing as you mature and acquire more responsibility, then diminishing in later life. Below you will find a brief description of several life stages, and a suggestion of their life insurance coverage needs:
As a single person, you may feel that you have little or no need for life insurance. Although there may not be anyone who depends upon your income for their well being, it would be a mistake to think that obtaining insurance is not important at this stage of life. At any age, a long illness prior to death can deplete your savings leaving insufficient funds remaining for funeral expenses. This could easily cause a hardship on parents or siblings left behind. By purchasing life insurance when you are young, you will be able to get it less expensively than when you are older.
Once you are married, your need for life insurance grows. In addition to providing for funeral costs, and other end-of-life expenses, increased obligations such as a mortgage and credit card debt need to be covered.
MARRIED WITH CHILDREN
Another life stage begins after the arrival of children. You will want to insure that their future needs are met, even if you are not there to meet them. At this point, your life insurance needs to be increased to cover the costs of their upbringing and education. You may also want to cover the additional income your spouse would need in order to stay home with them until they are grown.
This is the stage of life that you have worked all of your life to achieve. By this time, your children are grown, and your mortgage has probably been paid. You are ready to relax and enjoy life. Your life insurance requirements are much less than they have been in the past. However, you still may wish to provide funds to supplement your spouse's retirement or to finance your grandchildren's education. At this point in your life, you are more likely to suffer a debilitating illness that will swallow up your savings. Knowing that you have enough life insurance that you will not leave your spouse with a huge debt will give you peace of mind.
A listing of all of the available types of life insurance, along with links to more comprehensive information on each type, can be found by visiting the Types of Life Insurance page. Visit Life Insurance Basics, to find rate information, company ratings, information on the various uses of life insurance and discussions about the policies.
Once you are ready, you can request and receive a free life insurance quote immediately
. Learn how affordable life insurance can be by requesting your free quote now.