How to Shop for Life Insurance

You may be able to estimate how much you need online, but that’s just the start of your search.

- KAITLIN PITSKER

NO ONE NEEDS TO TELL YOU why you should have life insurance: If you die and your family or anyone who depends on you for support could no longer count on your income, life insurance would replace that income— assuming you choose a policy with the amount of coverage that is right for you.

In addition to deciding on the coverage amount, you have a few more hoops to jump through—namely, whether to buy a whole life or term life policy.

Whole life (often called cash-value or permanent life insurance) provides coverage for life and has an investing component that allows you to take a loan against the policy. The downside: Compared with term coverage, it’s expensive, especially in the early years of the policy. Term life provides coverage for a defined period of time—typically five, 10 or 20 years—without the investment and loan bells and whistles. What you see is what you get. Another advantage: Term life policies typically cost far less than whole life.