The first thing you should do when you begin life insurance planning is to take a look at the economic needs of your dependents when you are gone. Before you purchase life insurance, you should take into consideration your financial situation and the standard of living you want your dependents to maintain. You should also consider the long term financial needs of your family members. Needs such as the income for your spouse, mortgage and other debts, college education costs and emergency funds. You should re-evaluate your life insurance program periodically. Most financial planners recommend a review at least once every five years or if you have a major life changing event such as marriage, divorce, the birth or adoption of a child, or a purchase of house or business.

There are two main types of life insurance policies. The first type provides only death protection without any cash values. The second type offers or requires cash value accounts, in which a return on investment component becomes a complex and very expensive part of the policy.

Term life insurance is the easiest type of life insurance to understand. Term life insurance offers death benefit protection without any savings, investment or cash value items for the term of the coverage time period. This type of life insurance is available for certain periods of time such as 10, 15, 25, 30 years and during this time premiums are guaranteed not to increase. The company cannot cancel your policy as long as you pay the premiums. Because of the new and longer rate guarantee periods, term life insurance has become quite popular. Term life insurance premiums have also dropped to all-time lows. Other factors that have added to the popularity of guaranteed term life insurance include policy provisions such as guaranteed renewal and guaranteed convertibility.

Guaranteed renewal grants you the right to continue life insurance coverage beyond the initial guarantee period without a medical exam. This feature can be very important to you and your family if you were to become sick and uninsurable towards the end of your term life rate guarantee period. Currently this feature is found in most term life policies sold. However, before you buy a term life policy, it is best to ask the agent or issuing company if the policy contains a guaranteed renewable option.

Guaranteed convertible feature is the right to convert your coverage to any cash value policy that the company might offer at current rates without having to take another physical exam. Most long term life insurance policies have this feature automatically included. This feature may come in handy if, as a term life insurance policy holder, you decide you want a cash value life insurance.

Term life insurance is available on the internet, from direct to consumer life insurance companies, and from independent agents and brokers.

If you have questions or need additional information, please contact:
- National Insurance Consumer Helpline (800) 942-4242
- American Council of Life Insurers www.acli.org
- Insurance Information Institute www.iii.org
- National Association of Insurance Commissioners www.naic.org