(ARA) - Even in the best of times, life insurance can offer an extra measure of peace of mind in terms of helping to provide financial security. But the need for life insurance is even more significant during difficult economic times, when jobs are harder to find and dependents are in greater need of financial assistance.

The current high rate of unemployment is causing consumers to re-evaluate the importance of individual life insurance coverage, with many viewing it as an essential component of long-term financial security for their families and loved ones.

"People have been hit hard and aren't sure where to turn," says Mark Hug with Prudential's Individual Life Insurance business. "They see life insurance as a way to help provide stability and financial protection."

Hug notes that a recent report titled Navigating Life Insurance Choices in Challenging Times issued by Prudential Financial, Inc. in September, found recent layoffs made two-thirds of consumers realize they need more insurance than their employers provide. But, 22 percent do not have more coverage beyond what they get at work and 18 percent have no coverage at all, according to the report.

The discrepancy between the coverage people have and the coverage they believe they need seems to boil down to the fact that the choices in life insurance policies can be confusing.

Getting started

The good news is, determining your needs is not as complicated as it may first appear. When selecting a policy, consider several key things, including:

* Calculating how much coverage you need.
* Considering the period of time for which you need coverage to determine if term or permanent insurance is right for you.
* Determining how your needs fit within an overall plan that suits your personal circumstances, your financial priorities and your budget.

Understanding your options
Like its name implies, term life insurance provides coverage for a specified "term" or period of time. It is usually less expensive than whole life or permanent insurance, especially in the early years of the policy, and can be a good option for people who want maximum coverage at minimum cost.

Whole or permanent life insurance provides lifetime coverage and premiums are typically paid for as long as the policy remains in place. In addition to providing a death benefit, permanent policies can potentially accumulate cash value, which can be accessed via loans or withdrawals. Loans and withdrawals will reduce policy cash values and the death benefit and may have tax consequences.

When in doubt, a combination of coverage can be a good approach to cover all your bases. A financial professional or a life insurance agent can play an important role in helping you determine what level of protection you need by evaluating present and future financial responsibilities and income, and identifying the right products to help meet those needs. When it comes to financial security, life insurance offers the kind of guarantee you can take to the bank. Of course, it's also important to note that all guarantees are based on the claims-paying ability of the issuing company. For more information, download a copy of Navigating Life Insurance Choices in Challenging Times.

Courtesy of ARAcontent