An important feature of life insurance is that there is no federal income tax on proceeds paid to beneficiaries. Before buying life insurance, you should assemble personal financial information and review your family's needs. There are a number of factors to consider when determining how much protection you should have. Although there is no substitute for a careful evaluation of the amount of coverage needed to meet your needs, one rule of thumb is to buy life insurance that is equal to five to seven times your annual gross income. The Life Insurance calculator can give you a rough estimate of how much life insurance you may need.
Term insurance provides protection for a specific period of time.
It pays a benefit only if you die during the term. Some term insurance policies can be renewed when you reach the end of a specific period, which can be from one to 20 years. The premium rates may increase at each renewal date. Many policies require that evidence of insurability be furnished at renewal for you to qualify for the lowest available rates. Permanent insurance provides lifelong protection and is known by a variety of names.