• Decide how much you need (the amount of death benefits)
• How long you want the life insurance to cover you (1, 5,10, 15, 20, or more years)
• Compare insurance premiums with other companies
• Find out if the insurance policy fees are built into the premiums
• Ask is the life insurance policy is renewable
• Find out if it is convertible to whole life insurance
• Ask if participating life insurance policies are available (potential for dividends)

You can purchase term life insurance from an insurance agent but some companies market term insurance through the mail, internet or TV.

Mortgage Life Insurance is sold by insurance companies. It is called mortgage insurance but it is really a decreasing term life insurance that will pay off your mortgage if you die. You buy mortgage life insurance to protect your survivors from having to pay the mortgage.

The premium is structured where the policy begins with a death benefit that is equal to your current mortgage balance. The death benefit decreases at the same rate as your mortgage balance. The premium payments never change but may stop prior to the loan payment. The lender may agree to add the premium payments to your monthly mortgage payment.

The advantages to Universal Life Coverage are the policy has the potential for cash value to earn more than the minimum interest rate. Also the premium amounts and death benefits are flexible. You may be able to change the amount of your payments or your death benefit after you buy the policy. You can also increase your coverage by paying larger premium but you will be required to answer health questions or get a physical to increase the benefits on your policy.

It is possible that the cash value could grow faster than is needed to pay the cost of insurance. In most cases the policy holder can choose how that money is used. Talk to your agent about the options that are available.

Your Universal Life Insurance policy has 2 death benefit options:

1. Level death benefits is equal to the policy’s face value

2. Increasing death benefit is equal to the policy’s face amount plus the policy’s account value. The premiums will be higher for option 2.

Read and understand your policy.

The premiums are guaranteed to be the same for a given period of 10, 15, 20 or 30 years and is based on the cost of each year’s annual renewable term rates, therefore the longer the term, the higher the premium.

Most Level Term Life Insurance programs include a renewal option which allows the insured person to renew for a maximum guaranteed rate if the period needs to be extended. This clause is invoked only if the health of the insured deteriorates during the term.

If the insured person dies during the term, the death benefits will be paid to the beneficiary. It is the most inexpensive way to purchase a death benefit on the coverage amount.

Because Term Life is a pure death benefit, its use is to provide for covering financial responsibilities to the insured such as: to cover consumer debt, dependent care, college education for dependents, funeral costs and mortgages.