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Life Insurance

What is it? Life insurance is a way of protecting your family if you die unexpectedly. Your beneficiary would generally get a tax-free payment from the insurance company.

There are different types: term life insurance and permanent life insurance, like whole life insurance.

Term life insurance will pay out for a specific term, usually between 10 and 30 years. Permanent life insurance will last your entire life.

Another type, mortgage life insurance, will pay off your mortgage if you die.

Do you need it? If you only support yourself, life insurance might be a low priority. If you have family members who depend on your income, it's a sound investment.

Many people try to get enough insurance so that big expenses, such as a mortgage or college tuition for their kids, could be paid off if they died.

How much does it cost? Life insurance is relatively inexpensive compared to other types of insurance. Whole life insurance is pricier than term life insurance.

If you have certain medical conditions, such as high blood pressure, your rates may be higher. They may also be higher if you smoke or engage in risky behaviors, like skydiving.

What else should you consider? As with many other types of insurance, the younger you buy the policy, the cheaper your rate will be. Look for policies that have a guaranteed renewable premium. This means that your payments won't go up over the years.

Most experts recommend getting term life insurance, preferably the longest term possible. It's usually a better deal.

Supplemental Health Insurance

What is it? Supplemental health insurance will help cover out-of-pocket costs and services that aren't paid for by your current insurance. It might help with co-pays, deductibles, or other expenses.

Do you need it? It depends on your situation. Many people on Medicare buy a type of supplemental health insurance called a Medigap policy. As the name suggests, Medigap polices are designed to fill the gaps in traditional Medicare coverage.

There are lots of other types of supplemental insurance. Some might cover expenses if you develop a specific illness, like cancer, or are hospitalized. Another type, accidental death and dismemberment insurance, will pay for specific injuries or death caused by an accident.

How much does it cost? Although the benefits of Medigap policies are set by the government, prices vary, depending on the insurer. Some other supplemental health policies can be so expensive or restrictive that they're not worth it, Glazer says.

What else should you consider? Keep in mind that this would be a supplement to a regular health care policy, not a replacement for it. If you're considering a supplemental health care policy, make sure you understand your current health coverage. Some people wind up paying extra for unnecessary, duplicate coverage.

"You have to read through that booklet your insurance company sends you and understand what you're getting and what you're not," Glazer says. "Read the fine print."