Managing risks should be a continuous process so that you lay a stable foundation for your personal financial independence. It is part and parcel of the financial planning process. These risks are in the areas of tax, investment, termination, disability and business liability. Only the latter two risks can be insured.

For most people, managing risks equates to buying insurance. This is correct to a certain extent. Insurance products are becomingly increasingly specialized and no one product can adequately cover all your insurance needs. Moreover, your insurance needs must be reassessed each time a major change takes place, such as the birth of a child, a divorce, a death, or relocation. As needs change, insurance coverage must necessarily change too.

Below is a guide to the various types of life insurance available:

Term
Term insurance is coverage that you purchase for a period of time (one, five, ten years or more) and is usually relatively low in cost, especially at younger ages. It is akin to "renting" an amount of death benefit to cover a finite need, such as a mortgage obligation. Premiums usually go up every year since, as age increases, so does the risk of dying. Term insurance offers no living benefits to the insured. A benefit equal to the initial face value of the policy is paid to the beneficiary only if death occurs while the contract is in force.

One of the best and often overlooked features of some term life insurance is the ability of the insured to convert the policy to a permanent insurance policy, often without evidence of medical insurability. This allows people with large life insurance needs and temporarily tight budgets to put the necessary coverage in place at a low initial cost.

Its key features are: