One of the most important things you can do as parents is to ensure the financial well-being of your children in the event of your death. Life insurance is the best way to be sure that your children will be cared for if you die. Although we never like to think of that kind of thing happening, it does happen.

What is life insurance?

Life insurance is a policy that you can enter with your insurance company, which promises a certain amount to your beneficiary (ies) in the event of your death. Typically, one spouse will name the other spouse, as well as their children, as policy beneficiaries. As part of the life insurance agreement, your insurance policy will be a monetary value, which in return will pay a monthly premium. Premiums generally depend on your age, gender, occupation, medical history, and other factors.

There are other types of life insurance that can provide benefits to you and your family while you are still living. These policies can increase the cash value tax-deferred and can be used for future needs like retirement or your child’s education.

Do i need life insurance?

Earning income allows you and your family to do many things. Pay your mortgage, buy cars, food, clothes, vacations, and many other luxuries that you and your family enjoy. However, certain situations can cause you to lose your income, and those who depend on you also depend on your income. If any of the following statements about you and your family are true, it is probably a good idea to consider life insurance.

1) You are married and have a spouse.

2) You have children who depend on you.

3) You have a parent or relative who is aging, or disabled and is dependent on you.

4) You have a loved one in your life that you want to keep.

5) Your 401K retirement plan, pension, and savings are not enough to secure your loved one’s future.

What are my life insurance options?

There are four basic types of life insurance that can meet you and your family’s needs:

Term of life insurance

This is the least expensive type of life insurance coverage and, at least initially, the simplest. Term life insurance policies do not increase in cash value and are fixed for an extended period of time, usually one to 0 years, and can be renewed. This life insurance policy pays the beneficiary of your policy a fixed amount in the event that you die in the period of time that your policy includes. Term life insurance premiums are lower when you are young and increase as you get older.

Whole life insurance

This type of life insurance is similar to term life insurance, and it also provides cash value. Over time, whole life insurance typically builds up tax-deferred cash value, and some even pay a dividend to their policyholders. This type of life insurance is popular, depending on the cash value that you or your beneficiaries can access before you die. Used to supplement retirement funds or to pay for your child’s education, whole life insurance should be used for protection, rather than accumulation.

Universal life insurance

This type of life insurance is a type of flexible plan. These policies increase interest and allow the owner to adjust death benefits and premiums to their current living situation. You decide the amount of your universal life insurance premium, and if you miss a payment, it will be deducted from your death benefit. Universal life insurance remains in effect as long as its cash value can cover the costs of the policy. These rates are subject to change, but can never fall below the minimum rate that is guaranteed when you sign up for universal life insurance.

Variable life insurance

This type of life insurance is designed for people who want to link the performance of their life insurance policy to that of the financial market. The policyholder can decide how the money should be invested and its cash value has the opportunity to grow faster. However, if the market is poor, the death benefit on your life insurance policy will be low. As with whole life insurance and universal life insurance, you can make withdrawals against the cash value. Remember that withdrawals from this life insurance policy will be deducted from the cash value.

How can I save money with life insurance?

Here are some tips on how to save money when buying the right life insurance policy for you.

1) If you don’t need life insurance, don’t buy it. Don’t buy more insurance than you really need to provide financial security for your family.

2) Look for competitively priced life insurance policies while you are healthy. Don’t smoke or do anything that could increase your rates. Take care of yourself by exercising regularly and maintaining a moderate, healthy weight.

3) If you buy a term life insurance policy, look for guaranteed and renewable policies. That way, you won’t have to continue to periodically search for those life insurance policies.

4) You should only purchase optional forms of coverage, such as riders, only if necessary.

5) Find and compare the rates and coverage of life insurance policies. There are thousands of life insurance companies to choose from. It is recommended that you get at least three separate life insurance quotes and then decide which one is the best for you.