Life insurance is one of the cornerstones of financial planning. Coverage provides your loved ones with financial protection in the event of your death, and your insurance policy will help ensure future financial stability for your surviving family members.

If you're buying life insurance for the first time, here are some of the questions you need to answer.

The truth is, most Americans can benefit from a life insurance policy. Not only is this insurance affordable, but it's crucial if you have dependents.

Without life insurance, your dependents may have to drastically alter their lifestyles if you die. If you're the breadwinner for your family, they depend on your financial support to meet their expense needs.

When trying to determine whether you need life insurance, consider what would happen if your dependents were suddenly responsible for your final medical bills, funeral costs and other expenses, such as the mortgage for your home and monthly car payments.

What Should the Death Benefit Amount Be?

The amount of life insurance you need varies based on how much your loved ones depend on your income. For example, a $200,000 death benefit amount may only be enough to cover immediate obligations like final medical bills, funeral costs and any debt you left behind.

Before getting life insurance, you need to calculate how much future income will be necessary to sustain your household. For example, a $1 million death benefit amount may be enough if you have a spouse and one child already out of college. On the contrary, if you have a spouse and three young children who plan to go to college, a $1 million death benefit amount likely won't be enough.

What Are Your Surviving Family's Financial Needs?

When determining how much life insurance you need, it's a good idea to do so in two parts. For the first part, calculate immediate obligations. This includes medical bills, mortgage balance, outstanding debts and funeral costs. This is the amount your family will need immediately following your death.

Next calculate the future income your family will need, including college tuition and living expenses. Then add these two amounts together. This figure should give you a good idea of how much money your family will need.

When Should You Choose Term Life?

It's critical to choose the best type of life insurance to fit your needs. Term life insurance provides coverage for a set period and then you're no longer covered. It's a good choice for young families, as it's designed to provide financial protection for your dependents in the event that you die early. You choose the term and the premium remains the same throughout the entire term.

The typical term provides coverage for 10, 20 or 30 years. The goal for term life insurance is to choose a death benefit amount that would replace your income if you were to die unexpectedly. If you earn $100,000 per year and choose a 10-year policy, you may want to choose a $1 million death benefit amount. Keep in mind that this is a generic number. You'll need to calculate your family's specific needs.

When Should You Choose Whole Life?

Whole life insurance covers you for the entire time you're alive unless you surrender the policy. Whole life is designed to provide financial protection for your family regardless of when you die. Unless you have a young family, whole life is usually a better option.

Making sure your family is provided for in the event of your death should be one of your top priorities. Contact our professionals here at American Quality Assurance Group, to speak with one of our agents to find out more about life insurance coverage.