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There are several life insurance basics that you should be aware of. Life insurance is a necessary item to own in today's world and knowing a little bit about it can save you a lot of headaches and money. Here are a few tips to keep in mind when dealing with life insurance.
1. Whole or Term?
Decide on whether you want whole life insurance or term life insurance early in the process. Term will cover you for a specified amount of time and is cheaper. In contrast, whole life insurance will cover you for life. There are other variations of life insurance, but these are the two main categories.
2. Cash Value
Determine whether or not it is important that your life insurance policy has a cash value. If so, you should get a whole life insurance policy or variable. These policies have an investment component in them that allows part of your premium to be invested. If you like the idea of a maintenance free investment, this could be a good option for you.
3. Buy Enough Coverage
The last thing you want to do is under-insure yourself. Make sure that you buy a big enough policy to cover all of your liabilities and then some in the event of your death. You want your family to be well taken care of when you die.
