What you should do before buying the Term Life:

Understand your needs - how long you want it for, what the premium would be, who would be the beneficiary and owner; what kind of policy you want, identify the company and policy, compare ratings with other company's. Or take your neighborhood insurance agent's advice. The ensuing questions will help you analyze better.

•  Who will be the owner of the Policy?

Life insurance proceeds are included in the estate of a deceased of he or she has any "incidents of ownership" in the policy. Ownership by adult children or an Irrevocable Life Insurance Trust should be considered if there is an estate tax problem.

•  How much life insurance?

This will depend on the need it is fulfilling. Amounts needed to fund a business transfer or to pay death taxes may be readily determined.

•  What type of policy should be purchased?

A person trained in life insurance can explain the many different policies available and assist in selecting the one which best fits your needs.

•  How should the premium be paid?

Sometimes the amount of the premium can be paid from current income, while other times it may be prudent to reposition other assets so as to be able to acquire sufficient insurance protection.

As with every important purchase, it's crucial that you understand just what you're buying when you shop for Term Life Insurance. Even an inexpensive policy, if not designed to meet your particular financial needs, can result in money down the drain.