First, find out exactly how much your beneficiary is guaranteed to receive.

Don't assume that the face amount mentioned in an advertisement tells the whole story. Ask whether that amount is guaranteed and whether there are circumstances in which the benefit is reduced.

The key question is:

"What is the guaranteed death benefit?"

Next, find out exactly what you're committing to pay.

Ask:
"Is this premium guaranteed to stay the same for the life of the policy?"

Don't compare two monthly premiums until you know what each premium actually guarantees.

This is one of the easiest things to overlook.

Some policies provide the full death benefit from the beginning. Others may provide a reduced or graded benefit during an initial period.

Ask:
"If I die during the first year, exactly how much will my beneficiary receive?"

Then ask the same question for the second year.

You want the actual dollar amount, not simply "there's a waiting period."

This is where a policy that looks inexpensive can become very different.

For example:

$50 per month = $600 per year

After 10 years:

$6,000

After 20 years:

$12,000

Now compare that with another policy that costs more each month but provides different guarantees or benefits.

The monthly premium is important.

The total cost is important, too.

Before buying, ask:
"What happens if I can no longer afford this policy?"

Depending on the policy, there may be cash value, surrender value, reduced benefits or other policy provisions.

Don't wait until you're having trouble paying the premium to find out what your options are.

Let's say two policies both provide $15,000 of coverage.

One may cost less each month.

Another may cost more but provide the full death benefit immediately.

A third difference could involve what happens if you stop paying several years down the road.

That's why looking at only one number can be misleading.

The policy with the lower premium isn't automatically the better fit.

If you're comparing permanent life insurance policies, ask whether the policy builds cash value and what that value is expected to be at different points in time.

Also ask about the surrender value—what you could receive if you decide to end the policy.

Don't assume that an amount shown in an illustration is guaranteed. NAIC distinguishes between guaranteed and non-guaranteed policy elements, so it's important to know which numbers are actually guaranteed.

You're not only comparing policies.

You're also choosing an insurance company.

At a minimum, make sure the insurer is authorized to sell insurance in your state. You can also look into financial-strength information and other available company information before buying. California's Department of Insurance provides consumer tools for researching life insurers.

But remember:

A highly rated insurance company can still offer a policy that isn't the right fit for you.

The company and the policy both matter.

Before buying another policy, look at any life insurance you already have.

You may already have coverage that addresses some or all of the need you're trying to solve.

California advises consumers to be aware of duplicate coverage and to compare carefully before purchasing or changing insurance.

Don't cancel an existing policy just because a new one has a lower premium.

When you're looking at two final expense policies, ask these five questions:

1. What is guaranteed?
2. What will I pay each month?
3. What will I have paid after 10 and 20 years?
4. What happens if I die during the early years of the policy?
5. What happens if I stop paying?

If you can get clear answers to those five questions, you're already comparing policies much more intelligently than someone who simply chooses the lowest advertised price.

Here's the problem with doing all of this yourself:

You have to know what questions to ask before you know which answers matter.

An independent broker may be able to compare coverage from multiple insurers and explain the differences between the policies.

That can save you from trying to decipher several proposals that may look similar but aren't.

The objective isn't to find the policy with the lowest price.

It's to find the policy that fits your need, budget and circumstances.