When you are researching what kind of policy you should buy, your income, short-term and long-term debts, and financial obligations to your loved ones are among the factors to consider.

Figuring out which term you should buy - 10 years, 20 years, 30 years, or some other number - requires a major review of your debts, financial needs, dependents' needs, and when all these might change. Jack Dolan of the American Council of Life Insurers suggests you ask yourself, "When will my dependents reach financial independence?" Also look at major debts, such as mortgages or other loans, and at how much money your spouse or dependents would need in order to pay them off if you die.

Guenther Ruch of the Wisconsin Insurance Commissioner's office says it's a good idea to review your life insurance needs carefully, both when you buy the policy and on a regular basis throughout your life. "You may not have the coverage you need. You may have more than you need," Ruch says. Ruch has the following recommendations for anyone buying life insurance, or anyone who already has coverage:

Schedule a routine "check-up" with your insurance providers at least once a year.

Shop around for identical products and services. Not every company charges the same rate.

Remember an insurance policy is a legal document. Read it carefully, and make sure you understand your policy.

Determining the best coverage for your family is an important financial decision, both now and for the future.

Consumers can save themselves hundreds, and sometimes thousands, of dollars if they know how to shop wisely for insurance," says May Chao, executive director of the Consumer Protection Board of New York-state. If you are purely interested in financial protection for your family, that's what life insurance is designed for. So when your children are grown, reconsider your life insurance needs. You might still need coverage if a spouse or other relative depends on you. On the other hand, you might be able to scale back on the amount of life insurance you own. Perhaps you want to leave assets for your heirs, or for charity, or you need the death benefit for business planning purposes. These are all areas where life insurance can play a role, but it's really designed for financial protection. For that reason, after you've purchased life insurance coverage, you should periodically evaluate whether your current coverage amount is still right for you.

Term life insurance vs. whole life insurance

Variable universal life insurance (VUL), a form of whole life insurance, is popular because it offers a pool of money known as cash value that builds up with interest over time. The interest earned is based on the performance of the stocks, bonds, and mutual funds in which you choose to invest the cash value.

Some financial planners advocate VUL policies because they force you to save money in the cash value component. Others recommend you buy term insurance for the cheaper premium, and then invest the money left over in mutual funds or other investments. VUL also allows you to change your death benefit - and subsequent premium payments - over time.

Cash value in life insurance should not be considered a traditional investment, because any partial withdrawals or loans will reduce your death benefit. Also, if you partially withdraw your cash value or take out a loan against it, and the cash value exceeds the premiums you have paid into the policy, you will face a tax bill. In addition, every year you own the policy, more of your premium goes to pay for the cost of insuring you, and less goes toward the cash value.