---

Life insurance products are varied with many options that can be confusing. Trying to sort through the various forms of life insurance for proper coverage can be trying. It is important to understand some basic principles involving the uses of life insurance and the types of life insurance available.

 

The first thing to know about life insurance is that it is capital which is used to complete investment plans upon death. Deciding the proper amounts of coverage and the gaps the plan will face upon death should be done with help from a trusted advisor and input from family members who are affected by the plan. The following principles will help guide that discussion.

 

Each person has an idea of what financial success means personally. Either it has been achieved or it has not. Examining the current financial picture and contrasting it with what the final financial picture should look like will give definition to any capital shortfall. From there, the life insurance needs can be assessed.

 

How long will it take to accumulate the assets needed to complete the life insurance picture? Three to five years? Five to 15 years? Longer? The answers to these questions will help determine the appropriate life insurance vehicles needed to fill in the investment plan gaps.