Basic Information on Life Insurance

Life insurance helps protect the people who depend on you for financial support by replacing some or all of your lost income when you die. It can help pay expenses that your income normally would have covered, including mortgage payments, bills, and a dependent's child care or college tuition.

Some types of life insurance also accumulate cash value during the policy holder's lifetime that can be withdrawn or borrowed against.

Basics Life Insurance

• Determine what financial obligations you will have when you die. Decide whether you want to provide for college education for your children.
• Realize that in two-income families, each partner should be insured
• Understand that every obligation you assume should be offset by sufficient life insurance protection. Your insurance agent can help you determine the correct amount.
• Make sure all business obligations are protected with adequate life insurance coverage.
• Buy short-term life insurance, which can be used to pay off auto loans.
• Buy mortgage term insurance, which can pay off your mortgage in the event of your death.
• Realize that your final expenses can be covered by life insurance.
• Consider whether your survivors will be obligated to pay estate taxes.
• Understand that many financial planners suggest transferring part of an estate through life insurance.