Buying life insurance is one of those big money decisions that makes people break out in a sweat.

How much life insurance do I need?  How much is too much? What is the right life insurance for me?  Do I really need all the bells and whistles the insurance agent is selling me?  Will the insurance company be around for the long haul or go under and not be there when I need it? 

Back in the day, people felt comfortable sitting at the kitchen table with a friend of the family who sold insurance, having a cup of coffee and discussing your family's insurance needs. Now buying life insurance can be more like high stakes gambling - unless you know how to play the game.

Buying life insurance shouldn't cost you your life savings. And it doesn’t have to be stressful and complicated.  Here are seven big life insurance mistakes that can cost you a small fortune.

Life Insurance Mistake #1:  Buying life insurance when you have no dependents.

If you're single and don't have anyone depending on your income, ask yourself if you even need life insurance.  Life insurance is there to provide for your loved ones should something happen to you.  If you don’t have dependents, you might not need life insurance.

Life Insurance Mistake #2:  Buying life insurance as an investment.

No matter how persuasive your life insurance agent can be, I want you to repeat after me:  I will not buy life insurance as an investment. 

Ignore their promises of market-beating returns…we’ve yet to see a life insurance policy that delivers on those big estimates they give you.  We know an insurance agent's pitches can be pursuasive, but stick to your guns!

Life Insurance Mistake #3:  Buying insurance just to build cash value when you aren't using all available tax-deductible and tax-free investments.

Instead of buying insurance to build tax-deferred cash, fully fund your 401(k), Keogh and tax-deductible IRA. Even some variable annuities are better investments, with lower fees, than whole-life insurance policies.

Life Insurance Mistake #4:  Buying expensive riders.

Page 1 2 Next »