The main reason people purchase life insurance is to replace the income that would be lost with their death. The cash benefits provided by your life insurance policy can help so your dependents are not burdened with your debts after your death. Life insurance cash benefits could mean your dependents wouldn't have to sell assets, such as a home, a car or other valuable personal property, to pay off bills and taxes.

Before buying life insurance, you should review your family's financial needs. There are a number of factors to consider when determining how much protection you should have.

These include funeral costs, final illness costs and estate taxes, funds for a readjustment period, ongoing financial needs, such as mortgage, monthly expenses, college tuition and retirement. You should purchase life insurance that is equal to five to seven times your annual gross income. This will ensure enough financial coverage.

1. Your insurance premium; is the amount you pay each month for insurance coverage. Your employer may pay a portion of this premium, check with the human resources department.

2. Your insurance coverage; is the financial benefit amount that the insurance company will pay your family upon your death.

3. Your insurance equity; is the cash value your policy will accrue over time. The equity gain (cash value) of your policy highly depends on the policy you purchase, the company you purchase your policy from and the type of life insurance you purchase. This policy type is tax-deferrable on earnings from the accumulated cash value. So your beneficiary will not have to pay taxes on this cash value.

It is also known as "Permanent Life insurance". As long as you pay the necessary premiums, the death benefit will always be available. These policies are designed and priced for you to keep over a long period of time. If you don't intend to keep the policy for the long term, it could be the wrong type of insurance for you. See General Life Insurance for other types.

Life insurance is designed to provide financial security for your family after your gone. Find out more about Whole Life insurance; fill out the "quote" form and receive answers to your questions and a free life insurance quote!

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