Kel; my husband sells life insurance, so here's some of the info I've picked up from him.
First, what you need to figure out is what you are trying to cover. If the insured person dies, what do you want to cover? Pay off a mortgage, car payments, loans, other debts? Provide living income, or perhaps day-care if a stay-at-home mom is the deceased? Do you want to provide a nest-egg to cover children's education, weddings, etc. Figure out what the insurance money has to do, in terms of replacing a missing income and providing for the family.
A few things to consider. 99% of all term insurance expires without paying out. It's like car insurance, you never get anything back unless you need it, and in this case, you're sure hoping you don't!!!
Term also is unavailable after a certain age - I think it's 70 or so. If you live past it's expiration date, you may not be able to get any insurance to cover burial expenses or other debts and needs.
Term is also a great, less expensive option to cover a specific need that will also expire, such as covering a school loan, car loan, mortgage, etc.
Whole Life provides other benefits. It's more expensive, but you're building equity. Hubby sells for the Knights of Columbus and they have a great dividend - I think it's about 9%. With whole life you the option to take loans against your cash value if necessary, and at some point, some of the policies build enough cash value that the dividend can pay the premium, or you can let the dividends reinvest and the insurance value grows. Whole life is just that - it's there for your whole life, so when you pass on, funds will be available for your burial, to settle your estate, and to pass on to family, instead of leaving them a financial burden.
I'd recommend staying away from Variable or Universal policies which are tied into the stock market and mutual funds. Insurance is to Insure, not gamble on the market. You could find that you have less insurance then you wanted, and in market downturns they can become costly.
One option if cash is tight is to look for someone offering a convertable term policy - a term policy you can convert to whole life later on. You can get a lot of coverage now, and convert to permanent (whole life) later. Also consider some of both - term to cover some needs, and some whole life.
Things to keep in mind - life insurance is cheaper the younger you buy it, especially with whole life. Also, you can be denied life insurance for health reasons, so don't wait till you have a heart attack or are diagnosed with cancer to get your insurance. Get it while you are young to insure your insurability. And as he likes to point out to clients, one thing is guaranteed - millions of people will go to work tomorrow, but they won't all be coming home - something that's all too much on all our minds with the recent sniper attacks and 9-11.
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I hope this helps - let me know if you have any specific questions.
