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guarantees of payments. For example, the pension fund may go belly up (due to bad investments, for example) or the company may go out of business, leaving its pension fund in disarray. Pension benefits may still be inadequate in covering living expenses after retirement.

Life Insurance - The business of life insurance is perhaps one of oldest when it comes to asset and estate planning. Many of us are faced with the question of what happens to our dependents when we die. Life insurance has always been a popular choice for those of us seeking to protect our dependents. In simple terms, life insurance pays cash benefits to the beneficiaries of our choice when we die. The amount of benefits depend on the desired level of coverage (policy size). Life insurance is a perfect example of a risk/reward model. The higher the desired level of coverage and the higher the risk to one's life, the higher the premiums. Life insurance has been an evolving business to keep up with the other investment choices available to people. In that regard, life insurance (through its many incarnations) is no longer just a death benefit but it has also become an important tool for retirement planning. Let's look at some popular types of life insurance:

Term Life - Term life is the traditional life insurance we are all familiar with. You choose a certain amount of death (mortality) coverage over a certain number of years and pay yearly premiums during that period. Generally there are two types of term life insurance. In level-premium policies, the amount of yearly premiums are fixed during the term of the life insurance. In level-term policies, however, the yearly premiums gradually increase over time as the policyholder's mortality risk rises. In both cases the total amount of premium paid by the end of the policy is generally the same (factoring in inflation). The choice, however, depends on the policyholder's preference and the availability of the desired policy from the insurance companies. …