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Life Insurance is an agreement that guarantees payment of a stated amount of monetary benefits at the end of a specified term or on the death of the life insured. In realistic terms, life insurance provides you and your family the financial security and certainty to deal with the aftermath of any unseen unfortunate events.

There are several reasons to purchase life insurance. The most common reason to buy life insurance is to provide financial protection to your family in case of any unforeseen events. Besides providing for financial security in the case of one's untimely death, it can be used to accumulate a kitty for your old age, systematically build assets, for funding your child's education and also for saving on taxes.

Life insurance is very important part of financial planning. As soon as you start your career, you should consider buying a life insurance policy. The premium of life insurance policy increases with the age, therefore the older you get the more it will cost.

Life insurance needs depends on several factors such as present age, number of dependents, individual liabilities, loans and debts, annual income, standard of living, affordability etc.
Experts advice that the minimum insurance amount should be at-least 12.5 times of your annual income. Considering the 8% per annum average return on investment, your dependents will be able to earn the same amount of annual income by investing the claim amount in a bank.

Choosing life insurance plan depends on the individual needs and hence it varies from person to person. One should think about the purpose of buying life insurance before picking an insurance plan. It is suggested to discuss your future financial needs with your insurance advisor in order to choose the correct insurance plan.

As long as you are the breadwinner in your family, you should be insured. In India, average age of retirement is 60 years and hence, ideal life insurance term should be 60 minus your present age.

The cost or premium of life insurance depends on the type of insurance, your present age, term of life insurance, amount of sum assured, your occupation etc. Your age is very important factor, as said earlier. The older you get, the more it will cost.

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