Purchasing any type of insurance policy is never a particularly fun or easy process, but being properly insured is a critical keystone in a solid personal financial plan. So like it or not, we all have to be sure we’ve protected ourselves with the right coverage.

Of all the types of insurance that you’ll need to purchase, life insurance is arguably the most important.

After all, this type of policy is in place to protect your loved ones if you were to die unexpectedly, so it’s particularly important to select the life insurance plan that’s suits your needs.

If you’ve shopped for life insurance recently, you probably noticed that there are two basic types of policies out there: whole life and term. Most people are familiar the term life insurance, where the purchases pays a small monthly premium for (usually) somewhere between $500,000 and $1 million of coverage. Term insurance expires after a certain period of time, at which point the customer can renew the policy or go uninsured. These parameters make term insurance fairly straightforward and therefore popular among most Americans.

Whole life insurance is a little trickier, though. Unlike term life insurance, whole life insurance is meant to remain in place for the customer’s whole life (descriptive title, right?). Monthly premiums are higher, but a portion of the premium serves as a tax-deferred investment that the insured person can borrow against. Also, if the customer decides to discontinue the insurance, the cash value of the investment is theirs to keep.

This seems like a pretty good deal, but, surprisingly, most personal finance experts advise against purchasing whole life policies. Why? Well, there are a lot of drawbacks to this type of life insurance, including:

• Significantly higher monthly premiums
• Needless insurance – most people don’t have dependents by the time they’re in their sixties, so paying for life insurance isn’t really sensible anymore
• Limited options for the portion of the premium that’s meant to serve as an investment

So is a whole life insurance policy right for you? The short answer is, probably not. The only people who really benefit from whole life policies are very high-income individuals who have exhausted all of their other avenues for investing in tax-deferred vehicles. But for most of us, a term policy is the way to go.

Hopefully, you’ll never have to use your insurance policy, but if tragedy strikes, your family will be comforted to know you cared enough to do your research and make an informed decision!