You have assessed your financial situation and know what you can afford by way of a premium payment. Now you want to find the best value-for-money way of protecting your family. Before you can ask for life insurance quotes, you must first have a basic understanding of the different permanent life insurance policies on offer. That way, you know what you are asking about.

Single Premium. Here you make a one-time payment of a lump sum. This buys a fully-paid-up policy either offering a fixed or a guaranteed minimum sum. This is a long-term buy and, because the premium is usually substantial, you should only consider it if you have a large cash sum available and no better way of using it for investment purposes.

Whole Life. As the name suggests, this policy stays in place throughout your life no matter how long you live. You pay regular premium instalments but insurers can allow the option of only paying the instalments for the first ten or twenty years. This is life a Single-Premium policy on an instalment plan. If you find yourself in financial difficulties as you age, you can also ask to reduce or stop payments. Alternatively, if you have a cash lump sum available, most insurers allow you to top up the policy. The key feature of this policy is the cash value, i.e. a part of the premium is paid into an investment account which, with the right management decisions, accumulates in value. This money belongs to you and you can draw down some of this as cash or a loan, borrow against it or sell the policy.

Universal Life separates the life insurance element from the investment or cash element. This has two potential advantages. The range of investments accepts greater levels of risk and so the gains may be significantly better than in a conventional Whole Life fund. Secondly, you can change the balance of the premium between life insurance and investment over the term, i.e. invest more or less of the premium. This gives you more control over the final amount paid out. As with Whole Life you can also draw down some of this as cash or a loan, use the fund as collateral or sell the policy. Read the life insurance quotes carefully to see whether the policies offer a fixed amount payable no matter how long you have paid instalments, or combine a minimum guaranteed payment with a proportion of the cash value.

Variable Life is the same as Whole and Universal Life except that you dictate the investment strategy for the cash value. You have the freedom to choose from the insurers portfolio. This means a higher administration charge from the insurers but, if you optimize the investment decisions, the rewards can be significantly better than that achieved by the more conservative management teams employed by the insurers. Look for a policy that gives your family a guaranteed minimum payment in case your decisions go badly wrong or there is a recession and stock values fall unexpectedly.