What is Life Insurance and How Much Should I Get?

If you're starting your search for life insurance you may be wondering how it works and how much coverage you need.

These are two important questions to ask before shopping for your plan.

First, life insurance is a contract between the insurance company and the owner of a life insurance policy.

The policy owner pays the insurer premiums in return for the insurer promising to pay out a death benefit upon the passing of the person insured by the life insurance policy - subject to the terms and exclusions listed in the life insurance policy contract.

Determining the right amount of life insurance to purchase will depend on your personal situation, goals, budget, assets, debt, savings and your financial responsibilities including who relies on you for financial support and how much support you provide.

It's usually a good idea to use a life insurance needs calculator to assist you in figuring out how much life insurance to get.

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