1. TerAdvice on insurance (life, disability, and other insurances) including:
i) Types ii) How much coverage should we have (include analysis)?

i) Types of insurance:

i)

Generally there are two types of life insurance: Term (renting), and Permanent (owning).

For Term type of insurance, it needs annual renewable and is convertible to Permanent Insurance before the age of 65. This is a pure life insurance with no cash value element. The advantages of having this plan are because of : lower initial cost; flexibility of investment and pure death protection. However, the plan has no savings elements and will expire after specified period.

For Permanent type of insurance, there are three different categories: Whole Life, Universal Life and Variable Life. First is the Whole Life is the oldest form, it has guaranteed premium, which is generally higher than other types. Also, it investment products are long-term bonds and mortgages. The advantages for this insurance are: lifetime coverage, loan privileges, and variety of premium payment plans. The disadvantages of investing in this plan are the higher cost of death protection; low rate of return, lack of flexibility and may not keep pace with inflation.

Second, the Universal Life insurance has flexible premium payments and a high safety of cash value. The insurance company invests interest sensitive investments and it is regulated by state. This insurance is more suitable for people who want flexibility and forced savings, because it has flexibility; potential higher rate of return and full disclosure of fees, loads, portion invested.

Third, Variable Life has flexible premium and can be invested by policy holder in family of mutual funds. It can provide its investor a potentially high rate of return, control of investments, full disclosure required by law. Cash values are held in separated accounts, which are segregated from the insurer’s general investment portfolio. This plan is more suitable for buyer who is investment-oriented and wants a higher rate of return and/or want flexibility.

Besides the above life insurances, there is also disability insurance, which replaces income due to illness or accident (The person must be employed). However, it doesn’t replace 100% of income, it typically replace up to 70%. This insurance with guaranteed Renewal Contract; termination is prohibited before specified age as long as premium is paid. Also, for this kind of insurance, it is difficult to get individual coverage, and it is usually obtained through employer.

Another kind of insurance is Long Term Care Insurance, which is a type of insurance the