You may not realize it, but life insurance is important once you get married, buy a house with someone or have a child. Most people purchase a term insurance policy which will pay a set amount to the beneficiary if the policy holder dies within the boundaries of the term. If you are a healthy woman, you will typically pay less for life insurance than a man, but prices increase if you have certain health problems, are a smoker, or if you are older. You may choose to purchase permanent insurance which can be used as an investment, but is generally more expensive than term insurance. Unlike term insurance, permanent insurance does not expire after a set number of years.
When determining how much insurance to purchase, you will want to consider what it would take to replace your income if you’re not there. You might want to purchase a policy that could replace your income for five to twenty years so that your spouse can continue supporting your family. When choosing a beneficiary, most people pick their spouse, but if both spouses die, and a child is the beneficiary, you may want to make sure a testamentary trust is set up after your death. You can also set up a revocable living trust so that probate can be avoided, or set up an irrevocable life insurance trust which is the owner and beneficiary of the policy which protects your money from creditors, and protects your assets from being taxed. If you have dependents make sure to purchase life insurance so that their needs are covered in the event that you die.
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