If a term life insurance policy is convertible, that means that you are allowed to exchange your term life insurance policy for a costlier, whole life or universal life policy without a health exam. That can be important if health problems arise that would prevent you from qualifying for a new term life insurance policy or would subject you to exorbitant rates. Fully convertible life insurance policies are best, but some life insurance policies only let you convert during the first few years of the term. Permanent life insurance can provide protection throughout the insured's life subject to premium payment. Permanent life insurance is almost always more expensive than term life insurance, but it often offers flexibility in premium payments, a cash value element and potential tax advantages.
Different people have different life insurance needs.
Traditionally, a wage earner with a non-working spouse and children buys term life insurance to replace the income if he or she dies. Other reasons include paying for a child's college education or paying off a mortgage for a surviving spouse and family. Figuring how much life insurance you need depends on how many years the family will have to rely on the money, the inflation rate and other factors. Some experts say as a rule of thumb your life insurance policy should equal six to 10 times your annual income. But because this estimate does not take individual factors into account, you may want more or less than this rule of thumb.