Evaluate life insurance needs

Years ago, when I first started in this business, there were two primary types of life insur-ance: whole life and term. Whole life was -- you guessed it -- bought primarily to provide benefits for your entire lifetime. Term insurance was purchased for a "term period" normally one to five years.

Over the years there have been so many different types of life insurance that have come to the market that I find many people confused about what they have, and therefore, what they should have.

A few points: First, it is clear that no one life insurance product can satisfy all needs and one does need to reassess their insurance requirements as their situation changes. For most families, the greatest need is when there are dependents and a mortgage. Term insurance is a great solution and can be purchased for as long as 40 years. But, what after that?

Second, there is always a need for liquidity at death, and life insurance is a great tool to provide dollars when they are most needed. Hopefully, most of us will live a long time, but even so, life insurance is a valuable asset. Proof positive is that at every funeral, an inevitable question is whether the deceased had coverage. Also, I have never had a beneficiary complain about having life insurance benefits.

Over the last 20 years, I have seen a lot of folks buy term insurance ,locking in rates for 15, 20 or even 30 years. With the economy being what it is , there is a realization that coverage is likely needed for a longer period of time, perhaps even for the rest of one's life. If so, one is well advised to restructure their coverage now, as health conditions could prevent continuing coverage beyond the term period without a very expensive and ever increasing premium. If you are healthy and need coverage beyond the current term period, you are well advised to buy new coverage right now.

There are a variety of permanent life insurance policies in the market. This includes whole life and variable and universal life. These policies are very sensitive to interest rates and market return. The result is that many policies have underperformed original projections, the result being a lapsing of the policy in the future or higher premium requirements.