Of all the forms of insurance you can purchase, life insurance is the only kind of insurance where you know that what you are insuring against [in insurance lingo; the peril] is going to happen. Let that thought sink in while you ponder the long term return on your investment.

People buy life insurance for two reasons – either because they have to or because they want to. If they have to, it’s usually in order to secure a loan, fund a business requirement or due to a Family/Divorce Court Order. If they want to, it is usually an emotional need – they have a desire to provide for family needs, plan their estate, supplement their retirement or give someone a gift, charitable or otherwise.

Purchasing life insurance provides many advantages. It creates an immediate cash estate upon death, the death benefit is free from creditors [except IRS], the death benefit is income tax free [in the majority of cases] and the growth of any cash value is tax deferred and in some cases tax free.

Life insurance can provide substantial financial protection for your family. Have you ever wondered how your family would manage if you were no longer around to help them? How would they get by without your contributions to the family? Whether you are employed or not, your contributions are significant and your family would suffer in the event of your premature death.

If you have kids or others who depend on your income you need life insurance. It’s non-negotiable. Most people don’t want to think about it but if someone is depending on you financially then you need to have some sort of protection plan in place. A protection plan – that’s what life insurance is.

Many women rely on their spouse to take care of the details regarding life insurance and choose not to become involved or educated in the field. But statistically speaking, she will survive him. Having a clear understanding of what protection plan is in place is imperative and by the way, a man is not a plan!

Like it or not men die! Many women live with a false sense of security [see quiz]. Learn the facts about finances and women and once you do then you’ll know too much to go back and pretend. If you have a spouse, find out if they have a life insurance policy? Find it, look at it and understand it. If you do not have a spouse and are a single parent, it is even more important that you have life insurance to protect your kids’ future – this could be the single most important policy you have. When looking at insurance policies, you must know who’s life is insured [the insured] and how much money the beneficiary will get upon their death [the death benefit]. As life changes happen, so do our financial needs – so if you have not recently reviewed your protection plan, you may want to sit down with a professional and go over it. It could save you money.

There are two broad categories of life insurance:

Term: Term insurance is pure insurance for a specific period of time – a term. If the insured [the person whose life is insured by the policy] dies within the specified period [the term], the life insurance company will pay the designated beneficiary the face value [the amount] of the policy. If the insured survives the term, the coverage expires at the end of the term and there is no more coverage in effect.

Permanent: The other type of life insurance is known as permanent insurance. This form of insurance does not expire. As long as your pay the premiums, the insurance stays with you for life. These types of policies usually build cash value over time and some have guaranteed interest rates. Please see diagram below.

Life insurance is a contract between the policy owner and a life insurance company. In exchange for premiums [the money you pay], the insurance company promises to pay an agreed amount at some point in the future [this is when the financial strength of the company becomes important]. Your premium payments, and in some cases your death benefit, depend on the kind of policy you select. The beneficiaries can use the death benefit to replace income or perhaps achieve other goals. The estate you leave as security for your loved ones transcends death. The tangible asset left behind now allows the completion of family hopes and dreams….college, home, wedding, secure retirement, etc. It gives the family peace of mind and allows for a period of mourning without financial pressure. Life changes become optional rather than mandatory.

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