How do I buy life insurance?

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It's distressing to me how few people with young kids have life insurance

. The problem is the insurance that's best for people with dependents is not touted by the industry as a general rule.

Stay-at-home spouses have a special need for life insurance. A survey from Salary.com found that the "salary" such parents earn by dealing with laundry, kids, cooking, etc. is more than $121,000! That's more of an attention-getting number than anything else because stay-at-home parents don't actually "earn" that, but you get the idea.

Should a stay-at-home spouse pass away, the remaining parent would have to suddenly pay for childcare and everything else a stay-at-home parent does on a day to day basis. That's why it's essential the parent at home have a policy.

Cheap Term life insurance is the way to go
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Too often, we're sold insurance products with massive commissions and a high cost. That's a formula for failure when you have to pay the premium, and it sets too much of us up for a lapse in coverage.

A report found that 25% of people who buy cheap life insurance stop paying on the policy in the first three years. By the 10-year mark, it's almost 50% of us who quit paying. So you pay all that money to wind up with a big, fat goose egg.

What you need is a policy that's easy to buy, easy to own and cheap!

Buying what's called "term life insurance" is simple and costs practically no money at all. SmartMoney reports a 45-year old man can get a $500,000 level term policy with a coverage period of 20 years and only pay about $50 a month.

Women's coverage is even cheaper because they generally go to the doctor and take care of themselves! If a stay-at-home spouse is a woman, you generally want to buy a level term policy for 15 or 20 years, depending on the age of your children.

Make this one of your 3 simple money moves to make this year.

Remember these pointers when shopping for a policy

Shopping for term life insurance is easy on the Internet. You can comparison shop for quotes at any of a number of sites like HavenLife.com, Quotacy.com, PolicyGenius.com, 1stOptionInsurance.com, Insure.com, AccuQuote.com, or QualityTermLife.com.

If you're not into the Internet, that's fine too. Go buy a money magazine and you'll see ad after ad of companies selling life insurance. Some respected ones I like include Amica Mutual, TIAA Cref, and even USAA.

Certain health conditions make insurance more expensive or even unavailable. If you have such a condition, you're what's known as "rated" in the industry, which means you will pay more money than the example SmartMoney gave for a 45-year-old guy.

Here are some pointers to keep in mind as you look around for level term coverage:

How much life insurance do you need? The simplest rule is 10 times your income.

Only buy life insurance where you work if you have health problems. Otherwise, I prefer you to qualify and go through medical underwriting so you can buy a policy on your own. Most of us don't stay at the same place forever and you may not have a right to take that insurance with you.

Stay-at-home spouses who care for children should have insurance too. They have an "insurable need" because you'd have to pay someone to care for your children in the event a spouse or partner dies.

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