Life insurance provides money to your family or loved ones if you should die. Life insurance can also help protect the financial interests of a business if a key employee should die. Here, we will discuss the use of life insurance for your family.

Now, no one likes to think about the consequences of their death. Yet, people die of accidents and diseases every single day. Around 2.5 million people in the United States die every year. While diseases lead the list of causes, over 100,000 people die every year of accidental causes.

If you have family members that depend on your earning power, the important question you must ask yourself is, “What will happen to them if I am no longer around to provide for them?”

And, you must ask that question now, before you die of an accident or are diagnosed with a deadly disease. Once you are involved in a deadly accident, it’s to late to obtain life insurance. And, once you are diagnosed with a deadly disease it’s awfully hard to obtain life insurance.

Life insurance can protect and provide for your family in a number of ways:

- Pay off debts

- Provide care and education of your children

- Provide needed money before your spouse can make up for your lost income

=== Life Insurance Can Pay Off Debts ===

Many families live in a home with a substantial mortgage. Your mortgage typically represents your greatest debt. Your income is probably what provides the money to pay your mortgage payment. Life insurance can be used to pay off that mortgage debt if your income is lost.

Millions of families have a large credit card debt. They often cannot pay off their credit cards every month. Those families that seldom pay off their credit cards have an average debt of nearly $8,000. And, many families that declare bankruptcy have tens of thousands of dollars in credit card debt. Life insurance can be used to pay off that credit card debt.

=== Life Insurance Can Help Pay for the Care and Education of Your Children ===

If you are a family with “special needs” children, you may be paying for special tutoring or child care. These expenses will continue beyond your untimely death. Life insurance can help provide for your child’s special needs. This help could continue for quite some time.

A university education often costs $20,000 a year or more. Your savings and investments over the years could help pay that cost. But, if your income stops before those investments can grow to help your children with their education expenses, your children will have less money available to get them through their university education. Life insurance can be used to help provide the educational costs of tuition, books, fees, and living expenses.

=== Life Insurance Helps Your Spouse ===

Your spouse may or may not be able to make up for your lost income. Depending on your spouse’s age or other circumstances, your spouse may:

- Re-marry and gain another source of income.

- Wait until a pension and/or Social Security provides an additional income stream.

- Increase income from employment or entrepreneurial efforts.

Life insurance can help your spouse make the transition from the time of your death to the time of a new income stream. While life insurance sales people often want you consider your family’s lifetime income requirements, this is often beyond what is really required.

You need to consider how large an income stream your spouse needs and for how long before a successful transition to another source of income can be made. The face value of your life insurance can be tailored to help provide the income stream through this interim period.

Typically, as you become older and income from pensions and Social Security are closer at hand, your need for life insurance decreases. And, if you have built up sufficient financial resources, your need for life insurance is almost non-existent.

=== Types of Life Insurance ===

There are two basic types of life insurance:

- Term Life Insurance

- Whole Life Insurance

Term life insurance is simply a contract that calls for you to pay a premium for a certain number of years for a certain face value of life insurance. The length of the contract can vary from 1 to 30 years. If your term policy ends without your death, you receive no benefits. If you die before your policy ends, you survivors receive the full face value of the insurance.

Some term life policies are called “decreasing term” because the face value of the policy decreases over the years. Term life insurance policies are often “renewable” when they expire, allowing you to get another policy of term life insurance without a new physical examination.

Whole life insurance is a long term policy in which you pay premiums that provide for both life insurance and a “cash value” investment plan. When the policy is surrendered, it either pays the face value death benefit (if you die) or the “cash value” of the policy. Often the “cash value” of your policy is determined by a fixed rate of return on your premium payments. After some initial period, you can borrow against the cash value of the policy. The premiums for whole life insurance are higher than for term life insurance.

Whole life insurance is also offered with some variations in premium payments and face value amount. Such variable plans can be called universal life insurance, variable life insurance, or other names.

Several factors are important when considering whole life insurance. You should clearly understand:

- When Cash Value Begins to Build — Often whole life insurance policies do not allocate much of your premium to begin building a significant cash value before you’ve paid into the policy for 10 years or more.

- Rate of Return — The rate at which your policy builds cash value is often below the rate you could get if you invested elsewhere.

You should carefully investigate both term life insurance and whole life insurance plans. It is often wise to consider buying a term life insurance policy and investing the excess of what the whole life insurance policy would cost. That way you would have the benefit of both life insurance and a higher rate of return on your investments.

Overall, you should evaluate your circumstances to determine if you need life insurance. If you need life insurance you should determine how much insurance is appropriate and the type of life insurance policy that would best meet your family’s needs.

Bob Sherman is the owner of http://www.bobshermancredit.com that provides information about credit, debt, wealth building, and other financial topics. His ebook, How to End Your Credit Card Debt, is offered free to subscribers of his Credit and Debt newsletter.

“Do I need life insurance?” “Is whole life insurance a good investment?” “Is term life insurance risky?” Questions like these are posted in online communities on a daily basis. The answers vary widely, with the term life and whole life camps polarized. The tone of the debate is surprisingly strident. After all, the topic is insurance–not a something expected to inspire strong opinions, let alone strong language. But words like “rip-off,” “scam,” and “waste of money” fly back and forth, sometimes accompanied by rows of exclamation marks or worse. What is behind the brouhaha? And which camp -if either – is right?

The two sides do not even agree about whether a person needs life insurance. Whole lifers say, yes. You do not want the death of a family member to disrupt your family’s finances or jeopardize its future. It is hard enough to adjust to the loss of a loved one. Adding financial difficulties exacerbates the problem. With the skyrocketing costs of funerals, even children and seniors should have at least a small life insurance policy.

Not so fast, say the term lifers. The only reason to have life insurance is to replace the lost income of a family member who dies, and then only when the spouse or family is dependent on that income. If you are single with no dependents and no debts that might be transferred to your family in the event you die, then you do not need life insurance. If you are married and your spouse works, you probably do not need life insurance, either, assuming your spouse makes enough to support himself or herself.

The time for life insurance, term lifers say, is when the policyholder’s income is vital to the financial security of the family. If, for example, you have purchased a home together and your spouse could not pay the mortgage and other bills by himself or herself, then life insurance is in order. If you have children, you will want to have enough life insurance to allow your family to maintain its lifestyle after you are gone. This includes not only meeting day-to-day expenses, but also being able to follow through with plans for higher education. Insurance professionals recommend buying a policy with a face value 5-10 times the breadwinner’s annual salary to help family meet expenses for a period of years.

Whole lifers see problems with the term-life scenario. The view it as overly optimistic, even naive. Many things can happen during the 20- to 30-year period covered by term life insurance policy that could extend the need for coverage beyond the policy’s end date. For example, children may be born mentally retarded, with severe autism, or with another serious condition that could prevent them from becoming independent when they reach adulthood. Children also can develop a disease or suffer an accident that disables them. A spouse, too, can become disabled. In these situations, the family will remain dependent on the breadwinner’s income long after the term life policy expires.

Term life insurance advocates point out that in such cases, the breadwinner can renew the term life insurance policy, or take out a new one. Now it’s the whole lifers’ turn to say, “Not so fast.” By the time the second term life insurance policy is needed, the breadwinner will likely be in his or her fifties or even sixties. Due to the age of the insured, the cost of a second term life insurance policy will be much higher than the cost of the first was.

With the added years come added risks of certain diseases. If the breadwinner is obese, has developed high blood pressure, a heart condition, diabetes, or another disease, the cost of the term life insurance policy will skyrocket. If the individual has developed cancer or AIDS, he or she may not be insurable at all. In such situations, the cost savings realized on the first term life policy could be wiped out by the high cost of a second term life policy.

By contrast, the premiums of a whole life policy are set for life and do not go up with age or medical condition. A whole life policy cannot be canceled due to medical conditions, either. The policy remains in force until death, as long as the premiums are paid.

“Until death” is another advantage of whole life, its advocates maintain. Whole life gets its name from the fact that it insures the policyholder life until death. As a result, whole life insurance is guaranteed to pay a death benefit-the amount the policy pays upon the death of the insured. The death benefit can be increased-at certain points at no additional cost-as the policyholder ages. A small policy designed to cover the funeral costs of a child can be increased to provide adequate coverage during an adult’s peak earning years. Whatever the death benefit or “face value” of the whole life policy, the insurance company guarantees to pay it. As a result, the policyholder or his or her beneficiaries always receive some, all, or more than the premiums paid into the policy.

This is not the case with a term life insurance policy, whole lifers point out. The term life insurance policyholder can pay premiums for 30 years, but if he or she outlives the policy-even by a day-then all of the premium money is gone. The only thing the policyholder will have received is 30 years worth of peace of mind.

Whole life insurance, by contrast, accumulates a value that the policyholder can access during his or her lifetime. This value is known as the cash value or the surrender value. The whole life policy holder can use the cash value as collateral for a loan, or even borrow some of it during his or her lifetime. The policyholder must pay this amount back. If he or she dies before it is paid back, then the unpaid amount is deducted from the death benefit. If the policyholder decides to cancel the policy, the insurance company will pay him or her the cash value, which is then known as the surrender value. Whole life, its proponents maintain, is not only insurance against death. It is an investment for life.

This is where the debate turns nasty. Term lifers often ridicule the investment features of whole life. Because whole life always pays a death benefit, it costs 5-10 times more than term life does. Term lifers argue that a person is much better off getting a term policy for the same face value that they would get a whole life policy, then saving and investing the difference in premiums. Almost any investment will return more than a whole life policy will, term lifer proponents maintain. Over 20 or 30 years, the difference can be vast. Buy insurance to insure, the term lifers say, and use the savings to invest.

Whole lifers respond that the return on a whole life policy is guaranteed at the outset, something than cannot be said for other investments. To earn greater rewards, the term life policyholder must take greater risks in the open market. Many investments will outperform whole life insurance, but not all will. Some investments lose money, as shareholders in World Com, Enron, Peregrine Systems, and many other companies can attest.

Even if the investment will pay out, it is not certain that the term life policyholder will actually make it. To do so, he or she must calculate the amount saved over whole life insurance; save that money every month, quarter, or year; research possible investments; and contribute to that investment regularly for 20 or 30 years. This makes sense for disciplined and savvy investors, but many others will find the endeavor daunting and time consuming. They may not start it, and if they do, they may not continue it. Whole life takes care of insurance, savings, and investment in one easy payment. Even if the returns on whole life are not great, saving something is better than saving nothing, and nothing is exactly how much many term life policyholders will end up saving.

Both whole life and term life have pros and cons. People who are financially savvy and disciplined will gain from the term life scenario. Those who need a convenient and simple mechanism for insurance and savings will benefit from whole life insurance. Deciding which is best for you requires an honest appraisal of your goals, your lifestyle, and your investing skills.

An award-winning author of books for young adults, Bradley Steffens is a frequent contributor to online and print publications, including Gig and Broker Agent Magazine. A copywriter with 25 years experience, he creates website content for health insurance, life insurance, and homeowner’s insurance professionals. His most recent book, Ibn al-Haytham: First Scientist, is the world’s first biography of the medieval Muslim scholar known in the West as Alhazen.

Have you ever found yourself totally confused about a certain life insurance term? You’re not alone, we all have at one time or another. Well, here is a quick guide in understanding many of the common life insurance terms.

Accelerated Benefits

This insurance term is a provision in a life insurance policy allows someone diagnosed with a terminal illness to receive part of their death benefit early. It can also apply to someone who is permanently restricted to living in a nursing home.

Convertible Term Life Insurance

A convertible term life insurance policy allows you to convert to a different type of life insurance policy, such as whole life, without having to medically qualify.

Decreasing Term Life Insurance

A decreasing term life policy decreases by a set amount each year for the duration of the policy period.

Evidence Of Insurability

The medical information about you that a life insurance company uses to determine if you qualify for life insurance. This can also include other information about you such as financial and credit information.

Face Amount

This is the total amount of life insurance that will be paid upon the death of the insured to the beneficiary.

Grace Period

This insurance term describes the period of time after the due date for the premium on the policy that it can be paid without penalty. The standard grace period is 30 days, but each company may have different conditions.

Guaranteed Insurability

This is a life insurance option that allows the insured policyholder to buy additional amounts of life insurance in the future without having to medically qualify.

Insured

This is the person who is covered by the life insurance policy

Lapse

The insurance term that describes the discontinuance of the life insurance policy from not paying the required premium.

Level Term Life Insurance

This is a fixed amount of term life insurance that remains constant throughout the life of the policy.

Loan Value

The total amount that can be borrowed against the the life insurance policy.

Mortality Table

A table showing the statistical death rate for every age.

Paid Up Insurance

This life insurance term indicates a policy that is completely paid off with no further premiums due.

Premium

The cost for the life insurance policy. This may be on a monthly, quarterly, semi-annual, or yearly basis.

Rated Up Policy

A life insurance policy that is issued with a higher than normal premium due to the increased risk involved from the insureds health, hobbies, or employment category.

Reinstatement

Restoring a life insurance policy that was previously lapsed.

Settlement Option

The options given to the beneficiary in deciding how they wish to have the policy benefits paid out.

Surrender

This life insurance term is used when someone voluntarily cancels their policy for the cash value.

Term Life Insurance

A life insurance policy that provides coverage for a specified period of time.

Waiver Of Premium

A policy provision that provides a waiver of future premium payments due to the disability of the insured.

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Why you should get a whole life insurance online quote. Separate and apart from the reasons you buy life insurance it may be worth a few minutes of your time to think about getting a whole life insurance online quote. You buy life insurance to protect your loved ones. You want to be assured that they can continue on after your death. You approach the task with great passion. This is very important to you. You want your insurance now.

For a long time the normal thing to do was to either call a life insurance agent who you knew or get in contact with one of the better known life insurance companies. You would set an appointment with an agent and proceed with your business from there.

The Internet has made things so much simpler. You no longer need to contact the insurance company or wait for an agent to come and see you. Anything can happen between the time you call them and the time you actually make the purchase. You, of course, could be dead by then but that is not the worse thing that could happen. The frightening fact is that you could be rendered disabled. This could come about by some ailment coming to light or it could be caused by some type of accident. If you are disabled you may be rated by the insurance company because you are disabled or your application could be declined by them.

You might decide you are going to take up a hazardous avocation like deep sea diving or automobile racing. These things can also cause you to get a rated policy or not get any insurance at all. Did you know that a student pilot is rated by most life insurance companies. Until you get to that level where you have sufficient hours in the air to make the insurance company feel comfortable about you life insurance can cost you more.

The beauty about todays world is that you can get your whole life insurance online quote and even buy your policy on the spot in many cases. Life insurance companies have been selling term life insurance on line for a while now. Whole life insurance is now also available.

As whole life insurance does more than term it is important that you take the time to look at how these policies work.

Death Benefit.

Your whole life insurance online quote will show you the cost for a particular amount that will be paid if you should die. You decide how much you want. One of the things that your whole life insurance online quotes will not show is that this money need not be paid in one lump sum. You can choose to have it paid in the form of a monthly income. If the amount of your policy is large a monthly income may be the best way to have the proceeds paid. Of course there are other factors that need your consideration before such a decision be made.

Cash Values And Dividends.

Whole life insurance policies provide you with cash values which can be enhanced by dividends, if the life insurance company earns a dividend. If in the future, for some reason, you decide you no longer have a need for your whole life policy you can surrender it to the life insurance company for it’s cash value. In the early years these cash values are less than you paid in but the older the policy gets the closer the surrender value comes to the amount you have paid in. Eventually your cash value plus your dividend can far exceed the premiums you paid into the policy. Please bear in mind, however, that dividends are not guaranteed.

The Premiums.

When you get your whole life insurance online quote you will notice that the premiums are much higher than those of a term life policy. There are many reasons for that. Separate and apart from the fact that you can get back a considerable portion of you premium upon surrender dividends can be used in other ways. You dividend can be used, as an alternative, to reduce premiums. As the years go by the same insurance will cost considerably less in premiums.

Paid Up Additions.

Your dividend can also be used to purchase what is known as paid up additions. These are small fully paid up whole life policies. Upon your death the actual amount paid to your loved ones will be more than you originally contracted for as a result.

Because the insurance companies are getting more comfortable with the idea of providing whole life insurance online quotes the best of these policies can be purchased instantly. One of the more encouraging conclusions is that the bigger and better life insurance companies are providing whole life insurance quotes online as well as selling actual policies online.

For additional details on whole life insurance online quotes go to: http://www.lifeinsurancehub.net/whole-life-insurance-online.html

For more than 40 years Donald has been known for his extensive knowledge of the life insurance business. He has represented some of the largest and most admired life insurance companies in the United States as well as Canada. His advice is invaluable.

Donald’s website is: http://www.lifeinsurancehub.net

When it comes to life insurance over 70% of the adults in the United States have some form. The normal routine consists of a person in their early twenties or even late thirties purchasing some form of life insurance either through their company plan or on their own. Normally this life insurance plan will require the payment of a monthly premium of a pre-determined amount with the intent that the insurance policy will pay out a death gratuity or benefit in the event the insured consumer passes on prematurely. For many individuals the premiums are at a decent rate because many insurance companies are capable of offering cheap life insurance policies provided the insured individual is relatively healthy and at a rather young age.

Unfortunately as we age so does the cost of the life insurance policy. In order to obtain or keep cheap life insurance you may be required to reduce or eliminate some of your current life insurance coverage. Now with that said there are some very important decisions that need to be made because life isn’t always about cheap life insurance.

If your considering cheap life insurance or looking at ways to purchase cheaper life insurance rates you need to consider the reason your bought life insurance to begin with. If you’re still young enough where your children are in grade school or even high school and your spouse isn’t working then perhaps a cheaper life insurance policy isn’t the right thing for you. After all in the event of your untimely death the insurance proceeds will need to help your remaining family survivors live a decent life until such time as they can provide for themselves. Additionally the life insurance proceeds may be needed to pay off any unpaid debts you may have left behind.

On the other hand if your children are all grown up and moved out of the house and your spouse is working and capable of taking care of themselves then perhaps you should re-evaluate your current life insurance policy and see if there is a way to trim any unnecessary coverage amounts thereby lowering your total out of pocket cost and allowing you to have cheap life insurance.

Sometimes as your evaluating your estate and other monetary assets you may find that your life insurance policy can act as a hedge against any estate tax that will result in your passing on. In that case cheaper life insurance may not be the right answer since the proceeds will be needed to pay for the estate tax. In fact you may find that you’ll actually need to add additional life insurance in order to cover the estate tax involved with your possessions. This is especially true in cases where the estate is worth more then $500,000.

When considering cheap life insurance you must take into account the many functions that life insurance can assist your survivors with. For instance, it can be used to pay off a home mortgage or create a college fund for your children or grandchildren. It can be used as was previously mentioned to pay for any estate taxes and it can serve as a means of providing income for a surviving spouse and providing an inheritance for your children and grandchildren.

If your current situation does warrant or present you with the opportunity to purchase cheap life insurance then as you fill out the application needed to qualify for your lowered insurance rate make sure you answer the questions asked truthfully and accurately. Make sure to do your research with the Better Business Bureau in order to find out the claims history of your insurance company and if there are any prior customer complaints filed against the insurance provider. Remember you’re looking for cheaper life insurance not a cheap insurance provider.

As you do your research you will find that there are plenty of pros and cons for any insurance company you think about purchasing cheap life insurance from. There is no one single insurance policy that will cover all of your needs. Just remember the best type of insurance provider is the company that honors your insurance policy and pays the proceeds to your survivors when they are needed. Cheap life insurance or not, that’s the most important fact.

Timothy Gorman is a successful Webmaster and publisher of Best-Free-Insurance-Quotes.com. He provides more life insurance advice to include ways to find a cheap life insurance policy [http://www.best-free-insurance-quotes.com/life-insurance.html], that you can research in your pajamas on his website.