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If you can afford to make a hefty insurance payment every year and will be able to afford it for the next 12 years to 15 years, buy a whole-life insurance policy.

These policies are expensive, but after 15 years or so, your policy is paid off you're insured forever. You can also cash in the policy after you retire if you decide you don't need insurance anymore.

Most people can't afford a whole-life policy. If you need a lot of coverage at a low annual cost, considered a term-life insurance. You buy term-life policies on a yearly basis and renew the policy at the end of every year.

Term life policies don't build up cash value (they provide payment only if you die) and they often aren't available to people over the age of 65. The premium on term-life insurance is low for young people and it will go up every year (this is only true for annual renewal term).

Some people claim that whole-life insurance is overpriced by up to 600 percent and term insurance is the only way to go. We tend to be suspicious of whole life because it's a favorite of insurance agents. It generally provides high commissions for the agents. However, if you can afford the premiums on a whole life policy and you will need insurance when you are older, whole life will be less expensive in the long run.

A money-saving strategy on term-life policies: Switch insurance companies every four or five years to get the lowest rates they offer. Insurance companies will often offer the first four or five years of a term policy at discount rates to you, then the company begins to increase your premiums significantly. If you change companies every five years or so, you can take advantage of the lower rates offered to new customers. Insurance companies often dramatically in the rates they charge to people of a certain age.

Insurance companies often vary dramatically in the rates they charge to people of a certain age. Company E may have the best rates for 30-year-olds, while company B has the best 40-year-old rates.

* You can start this money-saving technique by picking the company with the lowest rate for your age.