The facts of life insurance - understanding the pros and cons of various policy types

Life insurance is one of the financial basics that everybody needs--right? Well, as the song goes, "It Ain't Necessarily So."

Granted, most people are covered by some type of life insurance, whether through a group plan at work, bundled as a part of veteran's benefits or as an individual policy purchased on their own.

Yet a single person with no dependents can probably get by without life insurance. And a married couple without children who are covered under a company plan usually won't need much of an extra cushion. However, parents facing tuition fees, a mortgage, medical costs, and car and credit card payments might be tempted to load up on as much insurance as they can affort. But before rushing out to buy coverage that equals five times your salary (a misleading figure that many people quote), be sure to assess your own specific needs with a life insurance conselor or, better yet, a free-only financial planner.

If you're perplexed by the complex world of insurance, you are not alone. Even financial advisers agree that this is one of the most misunderstood areas of the financial planning process. With nettlesome policy provisions and widely varying premiums, most folks have a hard time figuring out exactly what they've got. Are you underinsured? Overinsured?

Of course, no single formula can be applied to an individual or family's insurance needs. But there are some major issues that everyone should understand.

THE RIGHT POLICY FOR YOU?

Watch Barry Dyke, author of Pirates of Manhattan, video on Suze Orman

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