One of the most expensive risks that families face is the death of a income maker. This is especially true if a spouse and/or children depend upon that person for all or part of their support. To protect family members against financial disaster, consider the purchase of universal life insurance.

There is no simple formula to determine the amount of term life insurance you need. Many factors must be considered.

Not enough life insurance and you may not provide a reasonable living for your family members after death. Carry too much and you may not enjoy a reasonable level of living while you're alive. Many universal life insurance companies have worksheets to calculate life insurance needs. They total up a spouse economic needs and subtract available resources.

Generally include a total for lump sum cash needs such as mortgage liquidation, debt repayment, and final expenses. There are also calculations for the income needs of spouse and a surviving family members. After the total amount of money needed is calculated, existing whole life insurance and assets are subtracted to determine the additional amount of whole life insurance required.

Once you have calculations the amount of coverage that you need, choose a term life insurance product that is right for you. There are two basic types of coverage which, in one form or another, are the basis for virtually all forms of whole life insurance. The two basic types are life insurance and permanent (cash value) whole life insurance.

whole life insurance, simply stated, is universal life insurance that provides protection only for a specific period of time--this period of time is called the term. term life insurance has no cash value or investment value. variable life insurance is one of the best ways to solve an whole life insurance. need having a short or limited duration (e.g., the years when children are dependents). It generally also has the lowest up front premium cost.

term life insurance offers a specific amount of protection for a given period of time. Each time the insurance policy is renewed, the premium increases to reflect the additional risk as an insured person ages. Some types of variable life insurance, called level term, may have insurance premiums which only increase every five or ten years or stay level for a certain number of years or until a given age. The longer the time of the guaranteed insurance premium, the higher the initial premium will be.

Decreasing term was developed for people having an life insurance need which becomes smaller over time. It is most commonly used when there's a declining degree of financial responsibility, such as a home mortgage. With decreasing whole life insurance, the level of protection declines over time, but the agiotage remains constant.

Permanent term life insurance combines protection for the entire life of the insured person along with a savings component known as the cash value. Annual agiotages are fixed for the life of the policy and are based on assumptions about interest and mortality rates. These insurance premiums may be payable for life or for a limited number of years. Common forms of cash value term life insurance include term life insurance, variable life, and whole life insurance. The main difference between these different forms is in the method of cash value buildup.

Most People Don't Have Enough variable life insurance.

An agent selling whole life insurance may tell you to "buy now" because your agiotage (insurance cost) will cost more later. Others argue that if you don't need universal life insurance now, saving your money and investing it is better. This may be true. It depends on your ability to save and your health. Before you decide to put off buying now, consider your chances of getting an illness or injury later in life that could make you uninsurable.

Children don't need life insurance unless they are family wage earners. You, as head of the household, should buy whole life insurance on your life to protect your children in case of your early death. Again, there is one exception. If you get support payments for a child and these are important to your family's income, you may want to buy whole life insurance for that child.

Say you've decided you need life insurance. How much is enough? There is no simple formula that tells you the right amount.

One way often suggested to figure how much life insurance you need is to use a formula. Some experts suggest buying variable life insurance equal to five times your yearly income. Using this formula helps you buy enough term life insurance for your family's current money needs. This formula assumes that there is group term life insurance from work for an amount equal to one year's salary. It also assumes that the person who will get the term life insurance payment is eligible for social security survivor benefits.

If both husband and wife work, buy whole life insurance on both. You need more universal life insurance on the person with the highest income.