The first step in purchasing life insurance is to identify the life insurance needs for the dependents you will leave behind.

Consider your current financial situation and the standard of living you want your dependents and survivors to maintain. For example, you will want to cover any medical bills and funeral costs. Think about the issues that would arise after you are gone. Would your family need to move or change their standard of living? Think about how your family would be affected if you were to pass away right now. What would they need?

Then consider the long term needs of your remaining family members. Look at the dependency period for your children, the income of your surviving spouse, mortgage and debts and college educations.

Life insurance needs change over time. You should evaluate your policy with any major life events, or at least every five years. Look at changes in your income and assets, family size or debt acquisition.

The Illinois Department of Insurance points out that everyone, regardless of situation, should purchase a life insurance policy.

Here are some examples of people who need life insurance policies:

" A single person with no dependents would need a policy to pay for funeral expenses, medical bills, debts, elderly parental support in the future.

" A single person with dependents would need a policy to pay for funeral expenses, medical bills, outstanding debts, caretaker expenses for surviving dependents, education costs for children.

" A couple with no children would need insurance to cover funeral expenses, medical bills and outstanding debts.

" A couple with children needs insurance to cover funeral expenses, medical bills, outstanding debts, child-care expenses and educational costs.

" An older couple might need insurance coverage to cover funeral expenses, medical bills, impact on retirement income, outstanding debts and assets for the next generation.

You should need less life insurance as you age, because less people are dependent on your income for support. However, if you want to protect a business entity, pay estate taxes for heirs or have disabled children, you may need long-term coverage of a large amount.