Life is unpredictable. You may live a hundred years or you may have a life span of only fifty years. You may die of illness, an accident or anything else and then your dependants and your family will miss you. A dead man cannot come back but if he has made provisions for looking after his family when he is no more, the burden will be lesser. This will be a big support for the family who can use this money to cover the funeral expenses, pay off debts and the like.
Most people invest in life insurance so that their inheritors will get a substantial amount after they die. Or they may buy the insurance for a specific period of time and if they are still alive at that time, they will get the face value of the life insurance policy. Hence it is also an investment and a saving. When you buy insurance you sign a contract saying that in return you will pay a fixed amount every month, or once in two months, or quarterly or annually or whichever period is convenient for you. This payment is called the premium and it depends on a lot of things like your age, your health, your financial status and other things. The premium has to be regularly paid otherwise the policy may lapse.
Many companies sell insurance and they are different kinds. You can buy a whole life insurance which combines the death benefit with a cash value component. You may buy a term life insurance which covers only a specific period of time. You can renew a policy and change it if circumstances have changed. If you have lost your job and paying a high premium is difficult, you can adjust it to suit your pocket. Some types of insurance are permanent types which act like investments. They generally need a higher premium to be paid. The permanent life insurance can be an investment and also double up as a retirement vehicle.
You have to decide yourself as to how much insurance you need to buy. It is a difficult situation but if you see from all angles you will know how much to buy. It depends on how much premium you can afford as higher the face value of the insurance, higher is the premium. It ultimately depends on how much you earn and how much you spend. It also depends upon your style of living, so that when you retire and your policy matures and you get the insurance money you should be able to continue your lifestyle. Or if there is death, the dependents should not be left in the lurch and should be able to exist on the payment.
You can always research, look around, talk to people and then decide on how much insurance you should buy. A thorough check into your health and background will be made before you sign the contract. And you should read the policy properly before signing it.
http://www.quotes-r-us.org/life-insurance/buying-life-insurance-must
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