NEW YORK, NY: September was Life Insurance Awareness Month, and to help consumers better understand the importance of protecting the future of their loved ones, MetLife offered them guidance on life insurance.

In a press release, it said, "The first step when considering life insurance is to determine the necessity. As a rule of thumb, there are three situations in particular that may signal a need to purchase life insurance:

• If you have dependents-a spouse, children, and/or an aging parent or disabled relative-and your retirement pension and savings are not enough to insure the future of your dependents
  
• If you have a sizable estate
  
• If you own a business"
  

There are two main types of life insurance, including permanent insurance and term insurance. The difference between the two types is similar to owning and renting a home. Permanent life insurance is often an appropriate way to for people to meet long-term needs, and over time, builds in value.

On the other hand, purchasing term insurance is usually more appropriate for meeting short-term or temporary needs, and does not build cash value. "In addition to the security that life insurance provides for your loved ones, life insurance has investment value. Some types of life insurance build tax-deferred cash value over time.

That means that you do not pay taxes on the cash value accumulation and taxes are deferred until you receive funds from the policy. In addition, the cash value earned on a permanent life insurance policy can be withdrawn or borrowed against, to help with big-ticket items, such as a college education or down payment on a home."