Maybe a new baby sparked thoughts about the future, or perhaps you want to help protect your family's lifestyle. Whatever your reason, life insurance may be an important part of your financial strategy and a safety net for your loved ones.

The benefits from a life insurance policy may help your family cover expenses like mortgage payments, college tuition and day-to-day expenses if you pass away. Some policies even have a savings component, called "cash value," that you may borrow from in case of an emergency¹.

If you're buying life insurance for the first time, knowing the basics as you start your search can be helpful. Here are some things to keep in mind as you consider life insurance policies.

Reasons to purchase term life insurance

A term life insurance policy may be useful if you want coverage for a specific time frame — maybe until your kids graduate college or your mortgage is paid off. Term policies typically provide coverage for a set period, usually from 10 to 30 years, as long as you continue to pay premiums. If you pass away during your policy's term, your beneficiaries will receive the policy's benefit. Term life insurance policies are often more affordable than permanent life insurance policies, because they only provide coverage for a designated time frame, according to the Insurance Information Institute (III).

If you're concerned that your needs may change or you'll eventually want permanent coverage, talk to your agent about getting a "convertible" term policy. Convertible term policies provide the opportunity to convert to a permanent life insurance policy. Keep in mind that your premiums will likely increase with the change.

Reasons to purchase permanent life insurance

With permanent life insurance, as long as you continue to pay adequate premiums, the policy will remain in force. Permanent life insurance may be a good choice if you want to have coverage for the rest of your life. The III says premiums typically remain the same over time. However, some policies can be funded with a single large payment or a limited number of payments – like paying for 10 years, 20 years or until a certain age.

In addition to the death benefit, permanent life insurance also provides a savings element, called cash value. Cash value may be available for you to borrow from1 or used to help pay your life insurance policy's premiums.

Premiums for permanent life insurance tend to be higher than term policies, due to the cash value feature and the length of coverage, says the III.

Depending on the type of permanent life insurance policy you choose, additional options and benefits may be available to you. For example, with whole life insurance, the cash value typically increases at a predetermined schedule. Universal life insurance may offer the flexibility of adjustable death benefits and premium payments It’s worth learning more and weighing out the benefits of term vs. universal life insurance. A variable universal policy may offer the flexibility of universal life as well as a choice of investment options for your policy's cash value.

Your insurer can help explain the types of permanent life insurance policies so you can decide if one of them might be right for you.

Choosing life insurance coverage amounts

In addition to choosing the type of life insurance policy, you'll also need to determine how much coverage you'll need. First off, it's a good idea to plan for your policy's benefit to cover your final expenses, including funeral costs and estate taxes, says the III. Here are some additional factors that may influence how much life insurance coverage you'd like to buy:

Your income
Your age
Existing debt
Current expenses
Future expenses, such as sending children to college

How much you pay for a life insurance policy is based in part on the amount of coverage you buy. Other factors that may affect your life insurance premium include your age and health at the time of purchase. Your life insurance company may require you to undergo a medical evaluation or provide detailed medical information.

Choosing to purchase life insurance is a big decision, and it's important to choose a policy that fits your family's needs. If only a portion of your current life insurance needs can be covered due to your budget, it’s important to work with your insurer or agent to find a solution that at least provides some protection.