Life Insurance 101

(Life insurance is a vital facet in life that is often times overlooked by a wide variety of people. )

Many think that they either do not need life insurance, or it is going to be too expensive, but these are common misconceptions that should be dispelled.

Contrary to popular belief, life insurance is not just for the elderly or unhealthy, everyone, regardless of age, race or health status, should have life insurance.

People put off employing a life insurance plan for a variety of reasons. Many people just do not want to think about such a dismal thing, while others just keep putting it off, hoping they may never need it. But, life insurance is a part of life that everyone must come to terms with, and is something that everyone needs.

There are a variety of life insurance plans on the market today, so you will surely be able to find one that caters to your individual needs and wants.

An article posted on the OpenPress.com on October 3, 2006, "The mysteries of life insurance," looks into the basics of taking out a life insurance policy.

"It's a great mystery. Is it a foreign language of terminology and acronyms? What the heck is this life insurance anyway? Renewal, conversion, term, whole, universal - huh?"

Yes, it's true, life insurance can be a very daunting subject to undertake, but it is not really a mystery if you just learn the basics. First off, there are two basic types of life insurance available, term and permanent.

Term life insurance protects for a specified amount of time, say 10 or 20 years.

Permanent life insurance protects for the duration of your life.

"Ok, now what about all these kinds of life insurance? Here again, it's not really a mystery. The life insurance companies have different kinds of life insurance and what's really different about the different types is how long you're insured for. For the same person, life insurance that lasts for 5 years (5year term) is less expensive than 10 year term. 15 year term costs more and 20 and 30 year term are more. When you get to whole life insurance (or its cousin universal life insurance) it's really term life insurance with the time period being the rest of your life. Of course that costs the most! It's guaranteed to pay no matter how long you live."

Once you look past these two basic types, there are many other different policies within these two categories, such as universal.

First of all, you should contact an agent who is knowledgeable about life insurance, and is not there to take your money.

"First of all remember that, just like that insurance salesperson sitting in your kitchen or your conference room. Getting life insurance is important! But sometimes it's hard to figure out if that person in front of you is giving you the straight scoop."

A good way to start your quest to discovering life insurance is by beginning your search on the Internet. Just make sure you are looking at a legitimate site.

Life insurance is even more important if you have people who are financially dependent on you.

"If you have people that depend on you financially you should have life insurance and more than you expect. You can look on life insurance as a financial instrument that is used to replace the income that you no longer can make if you're not around. That's all - money arriving after a certain (but inevitable) event. So, if the amount of life insurance you should have is based on income then, logically, take a multiple of your income that would replace it. Get 15 to 20 times to be really safe or get at least 10 times income at a minimum."

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