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Who needs life insurance

People often wonder why they should buy life insurance, and how much life insurance they need. The reasons for buying life insurance are many. Most of us are responsible for the care of other people. They rely on us for food and water, shelter, schooling, medical and dental insurance, and other of life's necessities. We often take these things for granted. Our life goes on in a certain way, that that's the way it is: we pay the bills, and we pay them more or less on time, and because of that our families live more or less healthily and happily. Questions about life insurance, such as why buy it in the first place, and, if I decide to buy, how much should I buy, have both simple and complicated answers. The simple answers are that life insurance is a way to ensure that your family, in the case of your death, would go on living the sort of lifestyle that they've become accustomed to. How much life insurance you need depends on how much you make a year currently. You want your life insurance to cover what you would have made until you retired. That way, even in the case of your death, you can provide for your family. Financially, it's as if you're still around: the amount of money coming in is the same amount that came in when you were alive.
Other reasons for buying life insurance (and these factor into how much you buy as well) include leaving an inheritance behind, leaving a legacy. Estate tax issues are also involved, as you can formulate your life insurance policy to take care of these. You may want to leave an inheritance for your family that is larger than what you would have made by retirement. Or you may want to leave behind a certain amount of money for your favorite charities. Life insurance gives you these options as well.

Again, you want to calculate how much money you make a year and how much you would make in total until the day of your retirement. You add that number together, and that's approximately how much life insurance you need.
The calculation referred to above doesn't take in other things, other costs that come up when a person dies. There are special taxes involved when a person dies, and the cost of burial itself can be very, very high. The purchase of a coffin and a burial site can often cast as much as a new, expensive car. You'll want to calculate these sort of expenses in when figuring out how much life insurance you need.
Other factors are important, such as how much money your spouse makes, work and government benefits you may be in line for, and so forth. You can subtract these things from the total amount that you need. When it comes to life insurance, however, the general rule applies that it's better to be safe than sorry.
There are basically two kinds of life insurance, whole life insurance and term life insurance. Whole life insurance is more expensive, as you're paying for the costs of the insurance and investments made by the insurance company. It lasts for life, and can cost up to thousands of dollars per year. Term life insurance is less expensive and allows you more say in how you spent your money. With term life insurance, you choose the amount of years you want to cover, usually anywhere from one to thirty, and end up paying only hundreds of dollars a year. These are things to keep in mind when deciding how much life insurance to pay for.
Businesses may want to insure the life of an important person, a person key to running the business. Obviously, the head of a household, the one who brings in a regular paycheck, will need to be insured if the family expects to continue to pay the bills after his or her death.

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