When you think of life insurance or choose a particular type of policy, do you really plan for the future or only take your current situation and needs into consideration? If you are young now, are you choosing a policy large enough to cover your retirement and children’s expenses or are you not looking so far into the future? If you are thinking of a whole life policy are you considering the fact that a term policy with separate investments might actually be more suitable for you? Basically, in life insurance, you need to get things right the first time around or else it may lead to more expenses and costly cancellations later on. When shopping for life insurance, there are two important factors with long-term consequences – the amount of coverage and the type of policy you choose. The right policy will suit your individual needs and situation and the correct amount of coverage will provide enough for your beneficiaries to live comfortable after your death and still not be too high so as to make paying your premiums each month difficult.

So, how much cover?

• A general rule of thumb is that the amount of coverage should be about ten times your annual income. But, if you are really serious about planning for the future and providing for your family, it would be prudent to sit down and crunch some numbers before making a decision.

• Plan your funeral costs – A ball-park figure should do but you should do some investigations into how much a funeral will cost your family.

• List out your debts – Include all loans, mortgages, big bills or purchases that might become your family’s burden after you pass away.

• Work out your cost of living – You need to realistically account for future expenses to cover your family and what they will need to get by in your absence. For this you need to factor in the household income as well as monthly expenses and figure out how long your family will need support for. If you have small children (or plan to have children) you might need a policy with a longer term, for example.

• What about your assets? – If you have assets in your name, would you consider selling them in case of an emergency or would you prefer that they remain untouched and rely on alternative sources of income for your family. This would determine your coverage amount as well.

Once you have considered all the above points, you should be much closer to having a realistic coverage amount for your individual situation. Since the cost of a life insurance policy also depends on your sex, age, health, occupation and hobbies, you should collect multiple quotes from various life insurance before you make your decision. The Internet makes the process very simple and armed with all the information you require, you then need to decide which type of life insurance policy is best suited for you. The three main types of life insurance policies are:

Whole Life Insurance – Permanent life insurance or whole life insurance is a combination of insurance and investments that offers coverage for your entire life (or as long as you keep paying your premiums). Generally, this type of policy does not increase over the period of the policy nor do the benefits decrease. Though more expensive than term life insurance, whole life policies offer a cash value component that can be borrowed against and is tax-free.

Term Life Insurance – Term life insurance is less expensive and more flexible than whole life insurance. You can determine the policy amount as well as the term or period of coverage. Ranging from one to thirty years, term life insurance is ideal for short term needs such as mortgages and children’s education.

Variable Life Insurance – Variable life insurance like whole life insurance combines insurance with investment but the difference with variable life insurance is that you get to choose how your money is invested. While the benefits can be higher than other policies, so are the risks attached. And unless you are well versed with the markets, this is not a recommended policy to choose.

In the end, you need to ensure that the life insurance policy you meets all your needs. The younger you are when you buy insurance, the better the rates you will qualify for. Always compare quotes and review your policy every few years. Life insurance offers the best long-term protection for you and your family, so choose wisely and choose well.

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About AccuQuote:
AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.