Solving Life Insurance Mysteries

(ARA) - As we work our way through life, time and experience answer a lot of questions, yet somehow, a few linger - such as life insurance. For many people, life insurance remains one of the enduring mysteries of adulthood: Do I really need it? How much? What kind? Who should I get it from?

"Determining how much life insurance you really need, and what kind is best for you, doesn't have to be complicated," says Patty Reiners, assistant vice president of marketing for Ameritas Direct, a division of Ameritas Life Insurance Corp. "You can begin by asking yourself some basic questions."

* If I die tomorrow, will my life insurance cover my family's debts?

"First, the amount your family receives must at least be adequate to pay off your personal debts such as credit cards, mortgages, student loans, etc., so you don't leave them in a hole financially" says Reiners. "Totaling up those debts gives you a starting point to determine the most basic level of death benefit amount your family will need."

* Will my life insurance protect my survivors' current standard of living?

"Will your family be able to maintain their current lifestyle - stay in your house, keep kids in school, or your spouse at home?" Reiners says. "This can include extras like vacations or anything you think is important that they not have to give up for financial reasons. If your surviving spouse will likely be retired, look at your existing sources of retirement income and consider how much death benefit may be needed to bridge the gap between income and expenses."

* What will my children need?

"Next, if you have children still at home, consider how much additional money they will need to get them to a successful adulthood," Reiners advises. "Special opportunities such as club sports, camps, school and travel opportunities take money. Funding for extra education activities, trade school, college or even graduate school needs to be taken into account. Whatever your goals or plans for your children, they will require money to make them realities if you're not there to fund them."

* Do I have any special considerations?

Are you currently taking care of an elderly parent or a child with special needs? Your life insurance can help ensure they continue to be cared for if something happens to you. Do you own a business that you would like to see continue to operate? Life insurance can provide a buffer or financial support during the transfer and learning curve of new leadership. Is there a charity or organization that relies on you for support?

*What kind of life insurance should I look at?

There are two basic types of insurance to help you meet your needs: term and permanent. "Term is the most common," Reiners says. "Term policies offer lower annual premiums, and a definitive cost for the amount of coverage."

"Term can be right for people who want coverage for a very defined need or time frame," Reiners says. "It's a good choice for people with limited resources but who want to ensure income replacement. Plus, most term policies can be changed to permanent insurance at any time the policy is in effect."

"With permanent insurance, you pay more than is needed to cover the cost of the policy. The extra builds up as cash value," Reiners advises. "The cash value can provide flexibility, emergency cash, extra income, and can grow tax-deferred."

*What's a good first step?

An insurance calculator, like the one offered by Ameritas Direct at, can help clarify the amount of insurance you need. To access Ameritas Direct's easy-to-use life insurance calculator, visit, click on "planning" and follow the links for your area of interest. Or, call (800) 552-3553 to speak with a salaried, non-commissioned, customer service representative for advice on what type of insurance is right for you.

Courtesy of ARA Content

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