Having a safety net for yourself and your loved ones is important. Life insurance will help them, and you, deal with the unexpected and make transitional times as easy as possible for everyone involved. Many people have a negative, knee-jerk response to dealing with life insurance, but finding a policy can be a quick, simple experience. Once you have a policy in place, you’ll never need to worry about choosing life insurance again.

Life insurance is a contract with the insurer under which you pay a monthly premium and the insurer agrees to provide a set amount of money to your beneficiaries in the event of your death. Like other forms of insurance, life insurance premiums are established by various personal factors including your age, sex, health history and your occupation.

There are two primary types of life insurance available; term life insurance and permanent life insurance. Term life insurance is the most affordable, providing coverage for a set period of time. Term life insurance can usually be renewed at its expiration date, and a typical period of coverage spans between 1 to 30 years. Death benefits are fixed at the beginning of the term, and premiums usually increase with age. Alternatively, permanent life insurance has no set expiration date. Premiums will be higher than term insurance premiums at first, but they are locked in and will not increase with age. Permanent life insurance can be broken down into three sub-categories, each of which caries its own set of conditions.

Universal life insurance: This is the most flexible permanent life insurance policy available. It allows you to adjust premium payments and death benefits depending on your financial circumstances at the time. This means if things are going well, you can apply raised premium payments to your accumulation fund, while also being able to scale back payments if you run into unexpected money problems elsewhere.

Whole life insurance: While using life insurance as an investment is unadvisable, whole life insurance lets you build tax-deferred cash value. This can be withdrawn at your discretion, and many people find it useful for retirement or when paying for college.

Variable universal life insurance: This allows you to invest the cash value of your life insurance as you see fit. As with any transaction involving stocks and bonds, you bear the risk and reap the rewards. With this policy, fluctuations in the market can also influence the amount of your premium payments.

So how do you choose the life insurance policy that’s right for you? Figure out the monthly living expenses of your beneficiaries and use that to calculate the amount of insurance you need in order to allow them to live comfortably. Set out a realistic time frame and decide if any of your beneficiaries might be financially independent by the time the policy is activated. Do your homework when picking a provider, and go with a firmly established company well-rated for their service and claims history.

Here’s some interesting life insurance statistics:

• Only 68% of adults in America have a life insurance policy.

• 1 out of every 3 of these have a group life insurance policy offered by their employers.

• Bonds are the primary life insurer investment, coming in at 76.7% of all invested premiums in 2005. This is up from 72% in 2001.

• In 2004, the average life insurance coverage amount was $146,000. This translates it approximately 2.8 years of replaced income. However, Americans surveyed say they feel 6 years would be optimal.

• 12% of US households say they would be in immediate financial difficulties after the death of the primary wage earner.

• Industry experts estimate that, unlike other forms of life insurance, term insurance premiums have dropped 40%+ in the last decade.