Most of us buy life insurance to make sure that our loved ones are protected in case of our death. Others of us use whole life policies to finance life’s passages, such as college, marriage, or retirement. Whole life policies can also be used to help you handle those unexpected and expensive moments we all encounter. Defining your financial goals to determine exactly why you need life insurance will help you make the most of your life insurance policy. You need, and most of us do need, some coverage to provide a death benefit. That’s especially true if you have people dependent on your for their living expenses. You will want to make sure they are covered in case of your death, or a devastating illness, or an accident. And if you need more income for retirement, consider that, too, when you choose the type of coverage to meet your life insurance needs.

Once you decide why you need life insurance, then choose the type of policy that best meets your goals. Knowing what you want your life insurance policy to do for you enables you to get the maximum out of it, for both you and your family.

There are two major types of life insurance policies. Term policies, as their name suggests, cover a set term, usually a set number of years. These policies are less expensive, but they do not accumulate cash value and they only provide a death benefit. This cash, of course, can be accessed to cover funeral expenses. Many people combine term coverage with whole life, and a qualified insurance agent can help you determine the best mix for your needs.

After you determine what you want your life insurance to do for you, you have to make sure you can make the payments. Every kind of life insurance requires you to pay a premium. Term policies are usually less of a budget breaker than whole life, but they do not help you accumulate wealth. Make sure the policy meets your needs, but also make sure it fits your budget. Have in mind what you can afford to pay before you commit yourself to policy specifics.

Regardless of what you want from a life insurance policy, you need to be realistic. Make sure you are using your actual earning power and realistic retirement goals if you want the policy to replace your income. Don?t skimp on death benefits, as funeral costs are expensive and continue to increase. Make sure your family is taken care of, which will truly allow you to get the most out of the policy.

Think about where you are in your life and what you still want to accomplish. After you have all those ideas mapped out, then you will be able to decide which policy is right for you. Ask questions of a licensed insurance agent. He or she can help you find the policy that is best for and make sure your loved ones are protected.

Tom Martens is the content syndication coordinator at Lifeinsurance-Southafrica.co.za South Arica?s leading Life Insurance and Life Cover portal.

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