Insurance: Life Insurance

• Term and Permanent Insurance
• Choosing a Company and Agent
• Speaking With Your Agent
• Policy Questions
• Consumer Tips
• More Information

Life Insurance is the foundation of financial security for you and your family. It protects your financial resources against the uncertainties of life so you can plan for the future.

Choosing a life insurance product is an important decision, but it can be complicated. As with any major purchase, it is important that you understand your needs and the options available to you.

The American Council of Life Insurance (ACLI) has prepared this guide to help you know what questions to ask when you're buying life insurance.

The ACLI is a trade association of more than 500 life insurance companies, which collectively provide about 90 percent of the life insurance in the United States.

Why do I need life insurance? The main purpose of life insurance is to provide cash to your family after you die. The money your dependents will receive (the "death benefit") is an important financial resource: It can help pay the mortgage, run the household, end ensure that your dependents aren't burdened with debt. The proceeds from a life insurance policy could mean that they won't have to sell assets to pay outstanding bills or taxes. What's more, there is no federal income tax on life insurance benefits.

Where do I Begin? Start by evaluating your family's needs. Gather all your personal financial information and estimate what your family will need after you're gone. Include ongoing expenses (such as day care, tuition or retirement) and immediate expenses at the time of death (like medical bills, burial costs, and estate taxes). Your family also may need funds to help them readjust... perhaps to finance a move, or pay expenses while job hunting. Remember, life insurance provides financial protection. If protection is not your primary goal, you should consider other financial products.

How much life insurance will I need to purchase? While there's no substitute for evaluating needs, one rule of thumb is to buy life insurance equal to five to seven times your annual gross income.

Information from FirstGov for Seniors
American Council of Life Insurance Pamphlet