Most people don't wake up in the morning with the thoughts of implementing a life insurance policy. It might take the motivation from a spouse, possibly an insurance agent or an attorney. Or maybe you just experienced a death of a close friend or family member. If you look in the obituary section every day, you'll find the people passing away aren't all in their 80s and 90s. Possibly you realize something could happen to you and you want your family protected, financially.

Normally, it's suggested to have six to eight times your income, plus your bills, as a starting point in figuring out what death benefit you need.

What type of coverage you implement depends in a large part on what you feel like budgeting toward your life insurance program.

Term insurance is pretty simple. You buy a death benefit for a period of time. The longer the period of time the premium is level, the more you pay. Companies that allow you to renew or convert your coverage (if you feel like you need to continue the coverage after the initial period) are favored over the ones that don't. This allows you to protect your insurability should your health deteriorate. Other than checking out the insurance company (ratings, solvency, claims experience, years in business), and finding out if the period of term is guaranteed or not, it's fairly straight- forward in design.

Permanent insurance is much more complicated. There are three kinds of permanent insurance. All other policies are a variation of these three:

Whole life represents a policy that has a cash value component and provides for coverage to age 100 or thereafter. Whole life insurance is not based on stock market performance or dependent on interest rates, and guarantees that as long as you pay the proper premium, your policy will be in place whenever you die. Depending on whether it's a stock company or a mutual company, you also could get dividends, which have some favorable tax advantages in building cash value. The premium could be higher than a quote from another kind of insurance policy, because of the guarantees, so just price-shopping might get you a cheaper premium, but not what you really wanted in an insurance policy.

Unfortunately, some other forms of cash value policies are represented as permanent insurance, and many folks don't find out their coverage might not be in place for their whole life until their 60s or 70s (about the time they're going to use it). Often, at this point, it's too late or too costly to keep the policy in force.

Universal life gained popularity in the late '70s and early '80s. This was a time of high inflation and double-digit interest rates. Universal life was based on these interest rates and unfortunately, some representatives used this high interest rate in their projections, low-balled the premium and represented this as a permanent life insurance plan.

When interest rates came down, the plan was grossly underfunded, and their plan, in reality, was no more than a glorified term policy. Unfortunately, many folks did not realize this until policies were in a lapse mode. Then to correct the situation, it took a substantial amount of premium just to keep the policy in force.

If you have a universal life policy, ask your agent to not only review current values, but the guaranteed values, which include the maximum cost of insurance (with the economy, companies will be moving in this direction), and the lowest interest rate credited.

This way you can see the worse-case scenario and properly fund the policy. If you want it to last until age 90, it will cost more than if you only want it to last until age 70. Universal life, with its flexible premium and adjustable death benefit, is a wonderful product as long as it's properly funded to your mortality.

Similarly, variable life, which is contingent on stock market performance, if projected at a high rate of return, will look better than if projected at a lower rate of return.

Again, ask your agent to run an in-force ledger using possibly 0 percent, 6 percent and 8 percent, with the guaranteed maximum cost of insurance, and see if it's properly funded to your death.

All three kinds of insurance will work as long as they're properly funded. A lot depends on how you want the cash value invested, how many guarantees you want, how much premium you pay and how long you want it to last. It's always a good idea to make sure the death benefit you have doesn't lapse before you do.

* Next month: Is the glass half empty or half full?

Tim Schumacher represents Strategic Financial Partners in Hays. tjschu@yahoo.com