Life Insurance

If you have a family, many experts suggest that you need an amount equal to 5 to 10 times your annual salary. However, many people own higher coverages to provide more income for their family.

How can life insurance funds be used?

Your life insurance funds can be used for a number of needs, including:

• Any needs after the time of death, such as final illness expenses, burial costs and estate taxes.
• Funds for a readjustment period, to finance a move, or to provide time for family members to find a job.
• Ongoing financial needs, such as monthly bills and expenses, day-care costs, college tuition or retirement.

Life Insurance Buyer's guide

When you buy life insurance, you want coverage that fits your needs and doesn't cost too much. First, decide how much you need - and for how long - and what you can afford to pay.

When you buy life insurance, you want coverage that fits your needs and doesn't cost too much. First, decide how much you need - and for how long - and what you can afford to pay. Next, find out what kinds of policies are available to meet your needs and pick the one that best suits you. Then, find out what different companies charge for that kind of policy for the amount of insurance you want. You can find important cost differences between life insurance policies by using cost comparison indexes as described in this guide.

It makes good sense to ask a life insurance agent or company to help you. An agent can be particularly useful in reviewing your insurance needs and in giving you information about the kinds of policies that are available. If one kind doesn't seem to fit your needs, ask about others. This guide provides only basic information. You can get more facts from a life insurance agent or company or at your public library.

How much do you need?

To decide how much life insurance you need, figure out what your dependents would have if you were to die now, and what they would actually need. Your new policy should come as close to making up the difference as you can afford.

In figuring what you have, count your present insurance - including any group insurance where you work, social security or veteran's insurance. Add other assets you have - saving, investments, real estate, and personal property.

In figuring what you need, think of income for you dependents - for family living expenses, educational costs and any other future needs. Think also of cash needs - for the expenses of a final illness and for paying taxes, mortgage or other debts.