People buying life insurance policies should consider how much coverage they need, choose policy types based on their needs and figure out which plans are the most cost effective, notes About.com. Before choosing a policy, a person should first determine if he needs life insurance at all, as if he has no dependents or does not contribute much to the family's income he may be better off paying down debt rather than paying insurance premiums.
Consumers should determine how much life insurance they need based on how many dependents they have, other sources of income, debts and lifestyle, notes About.com. As a general rule, people should purchase life insurance policies equal to between five and 10 times their annual salaries. Some experts recommend that people under the age of 40 choose term life insurance plans, while variable life insurance plans are good for those who wish to build up cash reserves to invest in other options offered by their insurance companies.
People who wish to vary the amount of their death benefits may choose universal life insurance policies, states About.com. Whole life insurance may be good for those who want their premiums to stay the same over the course of their policies, and who want their coverage to remain after they are done paying their premiums. People should look carefully at all associated fees included in their monthly premiums to find any hidden costs.