Most insurance companies say a reasonable amount for life insurance is six to 10 times the amount of annual salary. Another way to calculate the amount of life insurance needed is to multiply your annual salary by the number of years left until retirement.

How do I choose the best life insurance policy?

To choose the best length for a term life insurance policy, consider the length of the debt or situation you want to cover. For example, if you’re buying term life to cover the years until your children are through college, and that’s in nine years, you might pick 10-year term life insurance.

Can you list yourself as a beneficiary on life insurance?

Every life insurance policy requires you to name a beneficiary. You can also name more than one beneficiary, as well as the percentage of the payout you want to go to each one—for instance, you could designate 50% to a spouse and 50% to an adult child.

How to choose the right type of life insurance?

For example, if you have young children and want to ensure that there will be funds to pay for their college education, you might buy 20-year term life insurance. Or if you want the insurance to repay a debt that will be paid off in a specified time period, buy a term policy for that period.

Can a person be a beneficiary of a life insurance policy?

Aside from minors, insurers don’t have rules on who you name as a beneficiary. In addition, life insurance beneficiaries are completely separate from those in your will, so the two lists don’t need to overlap, though they certainly can. A beneficiary can be a person, charity, business or trust.

How often should you change your life insurance beneficiary?

DO re-visit your life insurance policies every few years to ensure the beneficiary designations are current. DO amend your life insurance policy if your circumstances change, for example in the event of a new addition to the family, the death of a beneficiary or divorce.

How is a beneficiary designation form used in life insurance?

A beneficiary designation form is a legal document and will be used by the insurer to determine who will receive the death benefit if you pass away during the period of coverage (as well as how much they will receive).