Getting The Most For Your Money

by Michelle Martin, InsWeb

Your life insurance premium depends on quite a few variables, some of which you can control and some of which you can't. You can't change your age or your health history, for example, but you have power over whether you smoke, carry a lot of extra weight on your body or engage in high-risk activities like scuba diving or rock climbing.

There are several areas where you have the ability to influence your policy and its premium. The underlying message is this: Know what you're entitled to. Here are a few guidelines.

Assess your needs

The purpose of life insurance is to be sure that if you die, your debts will be paid, your dependents can continue to live in their current lifestyle, and if you have children, that their education, medical expenses and other major costs will be provided for.

How much life insurance you need, exactly, will depend on factors such as the size of your family, the age of your children, how much you owe on your home and whether other relatives are providing for any of your dependents.

Term life policies can serve to cover specific debts your family has. Say you owe $200,000 on your home. You can purchase a $250,000 term life policy (with many companies, price breaks occur every quarter of a million dollars) that extends 25 years or whatever the length of your mortgage is. This means your house will be paid off in full even if something happened to you.