Life insurance plays an important role in your financial and retirement planning.

Life insurance creates cash upon the death of the insured person, and can also offer tax advantaged growth inside the policy.

Your first step is to determine what you want to accomplish with your life insurance and if your need for life insurance is temporary (30 years of less), or permanent, for your entire lifetime.

If you have a family you might want your life insurance coverage to replace you income, pay off the outstanding mortgage loan, establish an emergency fund for living expenses, and an education fund for your child's college education.

You can use a simple life insurance needs calculator to determine how much life insurance is right for you.

Once you have determined the amount of life insurance coverage you need, the next step is to determine the type of the life insurance coverage to buy.

It's important to get the amount of life insurance coverage you need and can afford even if it is does not have all the features you want.

If your need for life insurance coverage is temporary, for instance, covering a short term loan, then a term life insurance policy may be appropriate. If there is a possibility you may need permanent life insurance coverage in the future, you should check to see what conversion options are available which would allow you to convert your term life policy into a permanent life insurance policy by a specific future date which is listed in the policy.

If you need is permanent which means that you want the coverage to pay out a death benefit when you die, not if you die before the policy expires, then a permanent life insurance policy may be right for your situation.