Life insurance is a highly competitive business, in which the sales force depends almost entirely on commissions. Insurance companies pay huge commissions to their agents for selling whole-life policies -- as much as 100% of your first year's premium goes to paying the agent's commission -- and the premiums for these polices are often five times that of term insurance. By contrast, the typical commission to the agent who sells a term policy is about 10%. Which one would you like to sell?

For most people, term life insurance will be the right choice because it offers the most coverage at the most affordable price. Term policies with level premiums (they don't increase during the term) are available for terms of 5 to 30 years. The longer the term, the higher the price, but it is still the wisest and most economical choice.

The following tables illustrate how inexpensive term life insurance can be, but of course it depends on your age, sex, health, and many other factors. These prices should just be considered for comparison purposes, as they are based on "preferred" customers which have excellent health, don't smoke, have safe jobs, etc.Your prices are likely to be higher, although they should not be considerably higher without good reason.

For term insurance, we recommend using online sources since you avoid the potential conflict with an agent trying to sell you a more expensive product. Insurance agents will argue that whole-life policies are superior because you can keep them the rest of your life and build up cash in them tax-free, which can then be borrowed. That is true, but they don't tell you about the high fees and commissions built into whole life as well as surrender charges (if you want to cancel the policy) that often leave you with little or no cash value five and even 10 or 15 years after you took out the policy. Also, the argument for tax-free buildup of cash just isn't that powerful anymore, given the proliferation of IRAs, 401(k)s and other tax-advantaged savings vehicles that have tiny commissions, much higher yields and complete portability.