INDIVIDUAL LIFE INSURANCE

To decide how much life insurance to buy, you need to first figure out what your goals are in purchasing this coverage. Ask yourself the following:

*Do I want to spare my loved ones funeral costs and outstanding debts?
*Am I concerned that my spouse or domestic partner will not be able to continue to pay off the mortgage if I die suddenly?
*Do I have dependents who count on my income?
*Am I concerned about college savings for my children or leaving savings for my spouse if i die.
* While all situations are different, here are two scenarios to help you think through the questions you should pose to your insurance professional.

Dependents

If you have children, a spouse who does not work outside the home or aging parents who you financially support, you have dependents. Alternatively, you may simply have a spouse or domestic partner who would be unable to pay the mortgage without your financial contribution. In either case, your loved ones will no longer have your income to help them pay the bills and maintain their lifestyle after you are gone. You will have to purchase enough insurance to provide for their future, while considering how much of your budget should be devoted to life insurance.

Some insurance experts suggest that you purchase five to eight times your current Income .While this may be a good way to begin estimating your family.Needs, you will also need to figure how much your dependents will need to pay for some or all the following:

*Cost of owning a home (mortgage, maintenance, insurance, taxes and utilities)
*College savings
*Food, clothing, utilities
*Child care
*Nursing home or elder care
*Retirement savings
*Funeral expenses and estate taxes

Your family may also need extra money to make some changes after you die. They may want to relocate or your spouse may need to go back to school to be in a better position to help support the family.

NoDependents

If you are young and plan to have a family in the future, you may also want to consider purchasing life insurance now so that you can lock in a good rate.

Just because you don’t have dependents, does not mean you don’t have responsibilities. For instance, you may be concerned with not being an economic burden to others if you die unexpectedly. You may also want to leave some money behind to close family, friends or a special charity as a remembrance. In this case, you should purchase enough coverage to pay funeral and burial expenses, outstanding debts and tax liabilities, so that the bulk of your estate goes to your family, friends or charities.Your insurance needs will vary greatly according to your financial assets and liabilities, Income Potential and level of expenses.

Beneficiary

A beneficiary is the person or entity you name in a life insurance policy to receive the death benefit. You can name:

*One person
*Two or more people
*The trustee of a trust you’ve set up
*A charity
*Your estate

Life insurance policy should have both “primary” and “contingent” beneficiaries. The primary beneficiary gets the death benefits if he or she can be found after your death. Contingent beneficiaries get the death benefits if the primary beneficiary can’t be found. If no primary or contingent beneficiaries can be found, the death benefit will be paid to your estate.

As part of naming beneficiaries, you should identify them as clearly as possible and include their social security numbers. This will make it easier for the life insurance company to find them, and it will make it less likely that disputes will arise concerning the death benefits. For example, if you write "wife [or husband] of the insured" without using a specific name, an ex-spouse could claim the death benefit. On the other hand, if you have named specific children, any later-born or adopted children will not receive the death benefit—unless you change the beneficiary designation to include them.

Besides naming beneficiaries, you should give how the benefits are to be handled if one or more beneficiaries can’t be found. For example, suppose you have two children and you name each one to accept half of the death benefit. If one of the children dies before you do, do you want the other child to get the entire death benefit, or the deceased child’s heirs to get his or her share. If the death benefit goes to your estate, probate proceedings could delay distributing the money, and the cost of probate could diminish the amount available to your heirs.

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