Before buying insurance, you must decide what is right for you and your family. Don't forget, your family also may be protected by such plans as Social Security, veteran's benefits, or other savings plans.

Before you decide on term or permanent insurance, think about how well you can save. Permanent insurance forces you to save through the build-up of cash value. Depending on the kind of policy you have, the rate of return may be low. Sometimes a cash value policy must be held for several years because most have no cash value at the end of the first few years. If you drop a cash value policy too early, you will lose money.

Studies show more than 20 percent of people buying cash value (permanent) policies lose their policies within 2 years of purchase. More than 50 percent lose them within 10 years.

Think about your tax situation. If you are in a high tax bracket, permanent insurance may be good because the savings built up in the policy are tax-deferred. Also the face value of a life insurance policy will be available to your family immediately after your death. With ordinary investments your family may have to wait for the benefits or be forced to sell investments at a loss.

Death benefits of any life insurance policy, permanent or term, are not taxable for income tax purposes. However, life insurance held in your name is added to your taxable estate for estate tax purposes. That is, if you own the policy and pay the premiums, when you die the insurance proceeds will be added to your other property to determine death taxes. Each person can leave property of up to $600,000 to heirs without paying federal estate taxes. Contact your county Extension office for more information on estate planning.

Deciding what kind and how much insurance to buy will take study. You can't do a good job on a hit-and-miss basis. Actually, the job will never be finished. Both your situation and insurance policies and provisions will change, so new possibilities will be open to you. No one can give you an exact formula, but you might keep these suggestions in mind:

1. Study your needs as a family. You must make the decisions as to which are the most important needs now and how much you can afford to pay for insurance that will protect you in the future.
2. Insure first the risk that would be most damaging if it occurred.
3. Review your insurance needs at least annually and more often if there is a change in the family: marriage, birth, new home, more possessions, etc.
4. Select an agent you can trust. Your most valuable guide in buying insurance is a reputable agent. A competent agent will take into account your needs now and any future needs you may have. You will want to review your program with your agent periodically as family needs change. Having an agent you can trust will ensure that you are not over- or under-protected with insurance.