Are you trying to decide on options for life insurance? There are a number of different choices out there, from universal life to variable life, term insurance to fixed insurance. In Missouri, all of these types of insurance are available from a number of different well-known and well-secured companies. How can you chose the right company and the right policy?

Part of the decision depends on what you are using life insurance for. If it is part of a wealth transfer plan, or used as an investment, you may wish to investigate some of the types of variable life insurance—depending on your risk tolerance (that is, how aggressively you want to invest your money based on returns vs. safety of the money), your investment horizon (that is, how long you have before you really need the money), your health situation (variable life policies can differ in rates/cost depending on the results of certain risk factors such as if you are a smoker, results of a physical, etc), and the amount of money you have to invest (some variable policies can be pricey, and sometimes you are paying for some of the guarantees that are a part of those policies).

If, however, you are seeking to purchase life insurance as a hedge against future emergencies—that is, to be able to provide a source of funding for a spouse or for children in the case of your death—you may wish to investigate term life insurance.

Term life insurance can be the most cost-effective method of purchasing some measure of insurance for your family. What you need to consider in determining the amount of insurance is what the policy will be used for—will a spouse have to pay off a mortgage after your death? Do you have children for whom you’d like to provide a college education? Some experts recommend a policy that covers up to ten times your income, but that is not realistic for every family. After all, you must meet the premiums monthly to pay for this term insurance, so you do not want to pay for too MUCH coverage.

Often, a financial advisor can help you to determine the right amount of coverage. Every family situation is different, so your advisor can take into account your priorities and the near-term and long-term needs for the proceeds of a policy. That advisor can also help you plan out what expenses may arise.

Life insurance, regardless of the type you choose, is important to your heirs who are often bereft at a loss. Any help you can give to ease the burden, financially, for them is important. Talk to an advisor to figure out how to cost-effectively include life insurance as a part of your financial plan.