Since there are certain financial commitments you need to meet throughout life and do contribute in some way to the family income, you need to provide something even in death—to secure the home, help the family meet expenses for a while, protect dependant parents, or secure the children or spouse.

Financial obligations could include funeral expenses, unsettled medical bills, mortgages, business commitments, meeting the college expenses of the children, and so on.

How much insurance a person needs would vary, depending on lifestyle, financial needs and sources of income, debts, and the number of dependants? An insurance adviser or agent would recommend that you take insurance that amounts to five to ten times your annual income. It is best to sit down with an expert and go through the reasons why you should consider insurance and what kind of insurance planning would benefit you.

As an important part of your financial plan insurance provides peace of mind for any uncertainties in life.

1. Life insurance correctly planned will on premature death provide funds to deal with monies due, mortgages, and living expenses. It offers protection to the family you leave behind and serves as a cash resource.

2. It secures your hard earned estate on death by providing tax free cash which can be utilized to pay estate and death duties and to tide over business and personal expenses.

3. Life insurance can have a savings or pension component that provides for you during retirement.

4. Some policies have riders like coverage of critical illness or term insurance for the children or spouse. There are certain rules regarding eligibility for riders which you will need to determine clearly.

5. Having a valid insurance policy is considered as financial assets which improves your credit rating when you need health insurance or a home loan or business loan.

6. In case of bankruptcy, the cash value as well as death benefits of an insurance policy is exempt from creditors.

7. Life insurance can be planned such that it will cover even your funeral expenses.

8. Term life insurance has double benefits, it protects and you can get your money back during strategic points in your life.

9. Insurance protects your business from financial loss or any liabilities in case a business partner dies.

10. It can contribute towards maintaining a family’s life style when one contributing partner suddenly dies.

Insurance is vital to good financial planning and security but you would need to assess your personal risk and long term commitments. Insurance stands a person in good stead throughout life and can be used in case of emergencies during a life time by requesting a withdrawal or loan.

You should note that with term life insurance that no payout is made is you are still alive when the policy reaches the end of its term.

Some people will take out the cover to run until they reach retirement age, when their mortgage will be paid off or when their children have completed their education and are not financially dependent on them. How long the term of the policy will be is down the individuals’ own needs and circumstances.

When calculating the sum insured, this will be based on the amount your loved ones would need in order to clear any outstanding debts or to replace your income, should you die. To give you an idea of how much life cover you may need, multiply your annual income by roughly 10. This amount may be the bare minimum amount that you need.

Where to buy the cover?

Using the internet can be a quick and easy way of finding life cover. Term life insurance can be found online with a website specialising in offering comparisons from various insurance providers and this is often the cheapest way to take out your policy. You can compare not only the cost of the insurance but also what the different policy features and benefits.

There are certain things you need to consider when looking for cheap life insurance cover, and that is how you can influence the premium. Firstly, by using a specialist broker, you can get access to a wide range of insurers, some of who may offer special web only deals. So, knowing where to get a cheap deal is the first influencing factor.

If you are a smoker then your policy will often cost you more. Therefore stop smoking for at least 12 months before applying for your cover and you could see a reduction in the cost when getting quotes.

The same can apply to those who enjoy drink, so cut down or stop

If you are aged in the fifty plus age group then look for companies who offer plans tailored specifically for this age group. There are some low cost deals available and a specialist broker will search for the cheapest quotes on your behalf.

Of course, being fit and in the best of health is the way to obtain the biggest savings on your premiums for life cover. The more exercise you get and the nearer you are to your target weight then the healthier you will be and the less chance of you getting ill.

Do note that taking on a joint policy (ie for yourself and your partner) can often work out cheaper when you take them out together. However, the insurance will only pay out once.

There are many insurance companies out there so when taking out something as important as term life insurance it is essential to choose an ethical insurance provider that is not going to disappear overnight. Your broker will help you find the right one.

In summary, term life cover would allow the ones you leave behind to be able to meet financial commitments which you probably took care of, without them having to struggle or worry about where to get the money when bills arrive.