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Saturday, April 22, 2006 - Page updated at 12:00 AM

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Play the game of life (insurance)

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Two good Web sites: www.insweb.com and www.insure.com

We routinely insure cars, boats, jewelry ... but ironically, often not our most valuable asset: our lives. Who wants to think about the unpleasant fact that one day, we're all going to die?

But financial planners say we should think about it and plan for loved ones in case we die prematurely. Certified-financial planner Robin Tan, who worked with the Volds, recommended the couple have $750,000 of coverage for breadwinner Todd and $500,000 for stay-at-home mom Lisa.

What kind? The couple have term-life insurance policies, the type Tan recommends. With these, you choose the amount of coverage and length of time the policy will cover. In general, the term should cover you until your youngest child graduates college or your spouse begins receiving retirement benefits.

More expensive is whole-life or permanent-life insurance, which offers coverage as well as an investment that builds value over time and has cash value. Tan says most people can better invest their money elsewhere. Exceptions: people with large estates or a business they're selling or who want coverage for longer than 30 years.

How much? A good rule of thumb, Tan says, is to buy life insurance worth between six times and eight times your salary — the higher end of the range if you have two or more children.

Stay-at-home spouses should have enough life insurance to replace child-care costs, Tan says.

Copyright © 2006 The Seattle Times Company

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