Where to start, where to end? Life insurance policy questions are pretty complicated and your best bet is to discuss what kind of coverage you need with your insurance agent.

However, a good rule of thumb is to consider your consider your family and how to provide for them when you're gone. Some say anywhere from five to ten times your annual salary is sufficient, but it really is something you should discuss with your spouse, taking special consideration of providing for your children's needs up to and including college expenses.

Term Life Insurance

This is, without a doubt, the least expensive insurance. It is also the most limited. It pays your beneficiaries upon your death. That's it. You stop paying the premiums and the policy gets cancelled. No buildup of money with this type of policy. But it is the cheapest tool in your life insurance arsenal.

Whole Life Insurance

This insurance, also called cash value insurance, builds cash balance over time that results from investments made with the premiums you pay. This can lead to a cash balance that no longer requires you to make payments depending on how those investments perform. There is some flexibility with this type of policy in allowing you to not make payments for a while if there's a cash balance or even taking a loan out against it for emergencies. However, it is much more expensive than term life insurance, as much as ten times more expensive or more.

Final Tally

Again, speaking to your agent is going to be your best bet. But bear in mind that the more expensive policies also have more hidden fees and charges that go to the agent and/or insurance company. You may consider hiring a fee-only insurance advisor, who can advise you on insurance without actually selling it to you.

---

Are You Paying Too Much for Insurance? Get an Insurance Quote Connect with a local agent and get the price you want to pay for insurance on your auto, home, and life.