Maybe you haven’t thought about life insurance much. Maybe you’re not “lucky” enough to have a family member who’s an agent barking at your door, or maybe you’re still young and don’t have family to worry about. Still, there are some basic things you need to know today that will help pay off big time in the long run.

Here are the things you need to know about life insurance, no matter what your current life situation:

1. There are two kinds of life insurance. There is term life insurance and there is whole life insurance.  Term life insurance is cheap and lasts you through the time of your life when you most need it. Whole life is an “investment” – but a bad one. Stay away from whole life. Run, in fact.
2. The life insurance industry runs on commissions. That means insurance isn’t bought, it’s sold. Your agent has a vested interest in selling you a high-profit policy.
3. Keep your investing and your life insurance separate. Don’t muddy the waters between life insurance and investing. Life insurance is a purchase in the same way that homeowners insurance is a purchase. Homeowners insurance isn’t an investment. It’s an expense. There are plenty of good opportunities for investment out there, and you should keep them separate from your insurance.
4. Get enough coverage for your needs. If you have three young kids, you probably want a lot of coverage. If something happens to you, they’ll be cared for. If it’s just you and a spouse, you’ll need less coverage. In addition, you want it to last as long as you need it to last – until your kids are out of the house or until retirement.
5. Buy life insurance while you’re healthy. If you smoke, or if you’re older, you’re going to pay exponentially higher rates. Buy early. Once you start your family, you should start buying life insurance.
6. Be honest. If you hide the facts on your life insurance application, you put the whole thing at risk. If your life insurance does kick in, the company will investigate to make sure you weren’t dishonest. If you are, it could invalidate your policy.
7. Shop online. The quickest and easiest place to buy term life insurance is on the Internet. Make good use of it, even if your neighbor is a life insurance agent.

Photo via Tessss