Protect Your Family — Life Insurance Tips

Businessweek published their top 5 life insurance blunders to avoid. Essentially:

• Don’t buy the wrong amount — ‘generally’ 5-10x your annual salary. Be sure to factor in health insurance, future college expenses, etc.
• Shop around.
• Make sure beneficiaries are aware that your policy exists and who to contact in case of your death.
• Don’t depend on basic life insurance provided by your employer, which tend to be fairly modest and insufficient.

I would suggest a few other points:

• Don’t set it and forget it. You should re-evaluate it, particularly after serious life changing events — marriage, birth of a child, change in marital status, new home, significant change in income. You might also want to change from permanent to term or vice versa.
• Clearly designate beneficiaries, delegated amounts and priority order of spouse, children, parents.
• Rather than guessing, get an insurance agent to make a recommendation for you, but don’t sign a contract immediately. Take the time to evaluate and research, or even get a second opinion.

Related Links:
Businessweek’s Life Insurance Blunders to Avoid
Every insurance company (MetLife, Prudential, etc.) has advice and recommendations on their Web sites.