Article  What Type of Life Plan is Right for You? When it comes to choosing a life plan, the choices can be confusing.  Be sure to take the time to research the options and make the right decision for you and your family.  Start by asking yourself if you need life insurance.  Your need will depend upon your life circumstances.  If you do not have anyone who depends on you, financially, your need for life insurance may be minimal.  However, if you have a family and you are responsible for the majority of the household income, a life plan will help you to protect and care for your family.  If your family does not have your salary to support them, the benefit from a life plan will help to pay for the mortgage, bills, even tuition.  Your family will have a difficult enough time if something should happen to you without having to worry about financial hardships. The amount of insurance that you need depends on many different things.  Consider your other sources of income, the number of dependents the plan will need to support, any debts that will have to be paid, and the lifestyles that you want your family to be able to maintain.  A general rule is that the benefit pay out should be between 5 to 10 times your annual salary. Think about what type of life plan you want to buy.  Your basic choice is between term insurance, whole life insurance, universal life and variable life insurance.  If you are young and in good health, you might consider term insurance.  Term insurance has a death benefit but does not hold any cash value.  Whole life insurance has both a death benefit and cash value and it is much more expensive than term insurance.  This type of coverage is expensive because half of the value is surrendered within seven years.  Commissions and fees typically limit the cash value of a whole life plan during these early years.  The premiums of a whole life policy remain constant over the life of the policy and will stay in effect until your death and a cash reserve is built up.  You do not have a choice as to how this money is invested, however.  If you choose a variable life plan, the policy will build up a cash reserve and you do have some choice as to how the money is invested.  Therefore, the amount of cash that your policy is worth depends upon how well your investments are doing.  If you want to vary the amount of the premium, consider a universal life plan.  You can vary the premium by using part of the earning to cover some of the premium cost.  You also have the option of varying the amount of the payout or benefit.  You will likely have to pay higher fees in order to have this greater flexibility.  For the most part, the most cost effective life plans are going to come from your company’s group plan.  These are usually term policies and you will be covered by the policy as long as your work for your current employer.  Check into this, however, as come policies can be converted.  The cost of any life plan depends upon the amount of the benefit, the type of policy, your age, and if you are getting a single plan or a plan that will cover both you and your partner.  If you smoke, are overweight, or have a dangerous job, you will pay more for your life plan.  You will also need to factor the fees and commission into the cost of your policy.  When trying to find the perfect life plan for you and your family, the internet is an invaluable resource.  You can use the web to educated yourself about the different types of plans, get quotes, and even find an insurance company to work with.  As a basic rule, if your goal is to purchase insurance to provide for your family, buy term insurance.  If you want an investment, buy an investment, not insurance.  It is usually better not to try to combine them.  Unless you are a confident, savvy investor, it is best not to risk the future well being of your family.  Find an insurance company and broker that you trust and who is willing to work with you and answer all of your questions.  Category Finance Author Anonymous Add To Favorites Print This Article Email Article To A Friend Post Comments   Rate This Article (0) 1 - Poor2345 - Good678910 - Excellent Added On Wed Jul 14th,2010