What are the different types of life insurance policies available?

There are several types of life insurance policies, but the most common ones include:

• Term Life Insurance: Provides coverage for a specific period, typically 10, 20, or 30 years. It offers a death benefit to beneficiaries if the insured passes away during the term but does not build cash value.

• Whole Life Insurance: Offers lifetime coverage with a guaranteed death benefit and a cash value component that grows over time. Premiums are usually higher than term life insurance but remain level throughout the policyholder's life.

• Universal Life Insurance: A flexible policy that allows the policyholder to adjust the death benefit and premiums within certain limits. It also includes a cash value component with the potential to earn interest.

• Indexed Universal Life Insurance: Similar to Universal Life Insurance, but offers the potential for higher returns while also taking a higher risk as the cash value is tied to indexes in the stock market.

How much life insurance coverage do I need?

Determining the right amount of life insurance coverage depends on various factors, including your financial situation, debts, income, family's needs, and long-term goals. A common approach is to consider a multiple of your annual income (e.g., 5 to 10 times) as a starting point. However, it's crucial to conduct a thorough needs analysis with the help of a qualified insurance agent to tailor a policy that adequately safeguards your loved ones' financial security in the event of your passing.