When was the last time you reviewed your life insurance policy? If you have insurance, is it enough? Do you even know what enough is?

The fact is, 44 percent of all U.S. households either don’t own life insurance or think they should own more, according to a new study by LIMRA International.

I understand it’s no fun shopping for a product that can’t be used until you’re dead. But for the sake of your next of kin, it’s important to know what you’re buying and how much you should buy. So let’s start with the basics.

Before you buy life insurance you first need to understand its purpose: Life insurance is meant to replace your income. If you have no dependents – a spouse, children, parents – chances are you don’t need life insurance.

For a good independent source of information on life insurance go to www

.insureuonline.org, a Web site created by NAIC.

Next, decide which type of insurance best suits your situation. There are two main types of insurance – term and permanent.

Just like it sounds, term life insurance provides insurance for a certain period of time, typically one to 20 years.

Then there is permanent life insurance, also known as a “whole life” or “universal and variable life” policy.

Permanent life insurance includes a death benefit as well as a way to build up cash value, which you can borrow against or use to pay your premiums.

For most people, term is best because it’s much more affordable.

So, how much to buy? I’d like to approach this question a different way by cautioning you about what you should not do:

¢ Don’t base your decision on a multiple of your income. Look at your total financial situation.

¢ Don’t buy based on your lifetime earnings potential. You can find a good calculator at www.life-line.org. Search for “Insurance Needs Calculator.”

¢ Don’t base the amount of life insurance you buy based on how much debt you have. If you die broke and no one co-signed for your debt – a mortgage, car loan, student loan, etc. – creditors can’t legally go after your next of kin.

Difficult as it is to put a price on your life, your family’s financial future and well-being is worth the effort. Take the time to do it, and do it right.