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Life insurance can be expensive, especially if you are looking to cover yourself for every eventuality that could possible happen. Initially, many younger people will not require a form of life insurance. However, as the number of people who depend on you grows, it is important to reassess your financial situation to cover your investments or those people who depend on you. The following three steps should enable you to find the right type of cover at the most suitable price for your individual requirements.

1. Do you really need life insurance?
The most common reason for buying life insurance is to replace the income lost when you die. For example, say that you work, and that your income is used to support yourself and your family. When you die and your income stops the life insurance proceeds can be used to continue to support the family members you've left behind.

Another common use of life insurance proceeds is to pay off any debts you leave behind. For example, mortgages, car loans, medical bills, and credit card debts are often left unpaid when someone dies. These obligations must be paid from the assets left behind but can deplete the resources that your family needs. Life insurance can be used to pay off these debts, leaving your other assets intact for your family to use.

Life insurance provides liquidity to your estate. When you die, you may leave some liquid assets (such as cash, CDs, and savings bonds), and some illiquid assets (such as real estate, an automobile, and stocks). Your liquid assets may not be enough to pay all the debts that you leave behind, plus all the expenses that arise because of your death (like funeral expenses). Your illiquid assets may have to be sold in order to meet these obligations when they come due. This may cause a financial loss if the assets must be sold cheaply in order to get the money on time. Life insurance can avert this situation, because the proceeds are available almost immediately upon your death.

Life insurance creates an estate for your heirs. After your debts and expenses are paid, there may not be much left over for your family but life insurance can automatically provide assets for them after your death.

Life insurance is a great way to give to charity when you die. You may have always had a great philanthropic desire, but not the means to make it a reality. Life insurance can do that for you.

2. What do you need to know about life insurance?
You need to know that there are several kinds of policies that may be available to you, if you are healthy enough.

• Level Term Insurance - A life insurance plan that pays out a lump sum in the event of your death during a specified term, some plans also pay out should you be diagnosed with a terminal illness.

• Mortgage Protection - A form of life insurance designed to cover a capital & interest mortgage, in the event of your premature death, where the lump sum payable decreases in line with your reducing mortgage debt.

• Critical Illness Cover - A critical illness plan provides protection in the event that you suffer a critical illness such as cancer, a heart attack, a stroke, or multiple sclerosis...not a pleasant thought, but at least you'll have the comfort of knowing you can still provide for yourself and your family

3. Shop around before you purchase your life insurance policy
As with all insurance products; search before you buy. There are many different providers and each will offer a slightly different policy and types of benefit. By searching on the Internet you can compare the different insurers and their policies to find the right product at the right price for your particular requirement. An additional benefit of buying online is that many insurers will offer you an introductory discount.

4. Other Factors
If are looking to switch your life insurance, do not cancel your existing life policy until you have purchased another one. This is particularly important if your health status has deteriorated as you could risk not being able to find an insurer who will insure you given your circumstances. Finally, remember that the older you are when you take out a life insurance policy the higher the cost of the policy.