When it comes to understanding term or whole life insurance policies, there’s good news and not so good news. The good news is that both term life insurance, which covers a set length of time, but gives no benefit once that period expires, and universal or whole life insurance, which is more expensive, but a whole-life policy that leaves a set amount to your beneficiaries, have become cheaper over the past decade. The bad news is that almost all of we mortals are going to need life insurance if we want to protect our loved ones after we die.

These are heavy considerations, but according to research firm LIMRA, the cost of this somber type of insurance has dropped 30 percent since the 1990’s. Studies also indicate that one in three Americans doesn’t have a policy, and of those who do, another third don’t think they own enough.

What that means to the savvy consumer is that now is a terrific time to compare online life insurance quotes and nail down a policy that will yield the biggest return for your investment. Marvin Feldman, president of the nonprofit Life and Health Insurance Foundation for Education (a.k.a. the Life Foundation), notes that “the reason premiums have dropped is life insurance is now based on the new 2001 CSO mortality tables, and those mortality tables show that people are living longer, so that when companies are calculating the cost of insurance, from a mortality standpoint, they can charge a lesser amount.”

But Feldman adds that to find those deals, you have to shop carefully – and doing it online is the best, quickest way. A rule of thumb is “the average person should have 20 times their annual income,” Feldman advises. Those figures are derived from findings in The 911 Report, but essentially, there are two major tests for determining how much you need: One is based on ascertaining what the surviving parties will need in the event of your death—to cover things like mortgage, college, car payments, and cost of living. The other is based on human life value—how much income are you currently earning and how many years can you expect to be earning it.

It’s important, when making those estimates, to get a notepad and write down unexpected expenses that your dependents may be surprised by—things like accounting fees, emergency medical and auto expenses, home repairs, the cost of returning to school, etc. A key insurance information site also recommends consumers not overlook hidden sources of income, which may well disappear with the deceased—for example, 401(k) plans and matching stock option plans, as well as health insurance subsidies.

To drive home just how important it is to provide for your family long after you’re gone, consider that they’ll need an estimated minimum of $15,000 to cover funeral and estate costs.

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