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Step 1
Evaluate your decision to buy life insurance. The reasons help decide which kind to buy.
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Step 2
Learn about term insurance. Term insurance involves regular premium payments over a specific term. Money is paid when you die to the person or people you designate as beneficiaries. Once the term is up, you no longer have any money to pay out.
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Step 3
Understand permanent insurance. This is also known as whole life, or cash value. There are regular premium payments as well, but part of the money is invested and becomes a form of savings. There are still death benefits.
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Step 4
Look at the premiums for term insurance versus those of permanent insurance. Term is likely less expensive. But remember once the term is up you have no money coming back to you, but premiums are less expensive.
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Step 5
Think about your needs and specific situation. Those who choose term insurance are often people with children, a business or other obligations requiring more than death benefits.
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Step 6
View permanent insurance as an investment. Because it develops a cash value, you can borrow against it or withdraw it later. Your investment grows during the time you pay into the insurance.
