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Consumer's Guide to Life Insurance


You may already own some life insurance, either through your employer's group plan, as part of your veterans' benefits or through a policy you bought yourself. But perhaps you think you need additional life insurance protection. If you have no life insurance, you may be thinking of buying some. Or maybe you have questions about the financial strength of a company. Whatever the case, this booklet can help you make the right decisions about life insurance. It tells you how life insurance works, describes the most popular types of policies, suggest how to decide what policy to purchase and whom to buy it from.*

The main purpose of life insurance is to provide financial security for your family. It helps to ensure that, when you die, your family will have the financial resources it needs to protect their home and car and provide the income needed to run a household. It is a contract between you and an insurance company. That contract requires that the company pay someone you name -- your beneficiary or beneficiaries -- a certain amount of money when you die. Your survivors can use that money as they see fit. The money is not subject to federal or state income tax (although it may be subject to death or estate taxes). With life insurance, you can provide a guaranteed financial nest egg for your family's future.


* If you have some general questions about life insurance that are not answered in this booklet, you might want to call the National Insurance Consumer Helpline at (800) 942-4242.

NICH is a consumer information telephone service sponsored by insurance industry trade associations. Trained personnel and licensed producers are available to answer questions about various insurance matters, to refer consumer complaints to appropriate sources and to send consumer brochures on request.

The Helpline operates from 8 am to 8 pm, Eastern Time, Monday through Friday.