Before you buy life insurance, ask yourself these three key questions about your life and financial circumstances, experts with the Financial Planning Assn. in Denver advise:

1. Do I need life insurance?

You do if people depend on you financially.

If you’re the principal provider to your family, you’ll need insurance coverage to replace your salary for however long it takes for your family to get back on their financial feet.

However, a full-time stay-at-home spouse should have coverage for child care, house cleaning and other chores.

A son or daughter who helps support elderly parents also needs life insurance coverage.

Also, don’t overlook business partners with a financial stake in your life. The Economic Growth and Tax Relief Reconciliation Act of 2001 eased estate taxes for family farms and businesses but doesn’t repeal them entirely until 2010, requiring life insurance coverage if the family firm is to carry on after you die.

Also, tax experts predict estate tax repeal will fall victim to the war on terrorism because of the pressure it puts on the federal budget.

2. How much life insurance do I need?

The rule of thumb is 4 to 10 times yearly income, but circumstances may make your family’s needs unique.

Obvious needs include one-time costs, including funeral and medical costs arising from death, estate taxes, and income replacement.

But don’t forget other expenses, whether to provide for a disabled child or adult who needs extra help to making up those lost retirement benefits you won’t accumulate for your spouse.

Be careful: Any inheritance by a disabled person of more than $2,000 can cost them all kinds of government benefits. Special needs trusts are a way to protect that person’s eligibility while addressing ongoing care and other needs.

3. What kind of insurance should you buy?

Insurance comes in many forms. Term life insurance that offers protection for a specified period of time for a fixed premium is only one.

There also are four kinds of “cash value” policies that are part insurance and part savings account. They include:

Whole life with constant premiums and death benefits over the policy’s life.

Universal life, which lets you change premiums and coverage to fit changed circumstances.

Variable life, which ties the death benefit and cash value to the performance of financial markets.

Variable universal life, which combines the risks and rewards of market performance with universal life.

Each of these four kinds of policies has a different premium structures, death benefits, investment options and degrees of flexibility, but all carry fees that are front-loaded to the policy’s early years.

But before choosing between term life or a cash-value policy, decide how much coverage you need and for how long: Insurance should be bought first and foremost for death benefits and is only one part of putting your personal finances in order, according to experts with the Financial Planning Assn.

For more information about life insurance needs, contact the Financial Planning Assn. at (800)-322-4237, or visit them on the Web at www.fpanet.org.