Life insurance, whether you are talking about whole life, term life, or one of the many policy variations available, can be a complicated and misunderstood subject. Perhaps for this reason it is not unusual that we make wrong decisions when purchasing a life insurance policy. With that in mind, we would like to bring up what some experts consider to be the four most common mistakes made when purchasing life insurance.

First, treating your life insurance policy as a savings account. Insurance is often purchased for two reasons, tax savings and as an investment instrument. Many experts believe that life insurance is best purchased to do what it is intended to do, which is provide protection in the event of loss of life. For this reason we suggest, as do many insurance experts, purchasing a term policy for life insuance, and for savings purchasing a separate mutual fund account. Granted, this view is somewhat of a purist viewpoint and will not be for everybody. Still, term policies are relatively inexpensive, free of complexities, and payout quickly.

Second, allowing your agent to make all of the decisions. Do your homework and understand what you are buying. We urge you not to trust your agent too completelyregardless of how honest or well intentioned you believe him or her to be. Your agent may be a model of intelligence and integrity, but the ultimate responsibility for any decision made rests with you; dont give someone else all the power.

Third, treating the purchase of life insurance as a one-timepurchase-and-forget-about-itactivity. Your needs will change over time. As your life circumstances change, so will your insurance needs. For example, the sort of policy you buy as a single individual will not provide adequate coverage should you decide to marry and start a family.

Fourth, buying the wrong kind of insurance. Yes, this is an all too common mistake. For example, many people buy universal or variable life insurance policies without properly understanding the kind of insurance theyve bought and that these are complicated investment instruments. This sort of purchase might be completely wrong for a single person whose income would not allow premium payment in the event of unfavorable market fluctuations.

When buying life insurance, be sure to take the time to do your research. It isnt necessary to spend sleepless nights in the library. However, it is important that you thoroughly understand your needs and which sort of life insurance will offer the best protection with respect to the demands of your life. There is a great deal of concern about finding the cheapest, or lowest cost life insurance. But one action you can take to insure you get the lowest premium price for your life is to put in the time to learn how to make an informed decision about the life insurance that will serve you best.