Among parents' major responsibilities is planning for the financial future of your child. Often a central component of this planning is buying life insurance. If you weren't around, would your spouse be able to carry on financially without your income? In households where one person stays at home, the loss of that caregiver can have huge financial impact in the form of new expenses for childcare, babysitters or a nanny. Most people buy life insurance specifically to replace income if they die.

Shopping among all the choices for life insurance may at first seem daunting, but here are five simple steps to making a good buying decision:

• 1) Pinpoint how much life insurance you should have.
• 2) Decide on the most appropriate policy type to meet goals (i.e. term, permanent, universal or variable universal).
• 3) Choose a good company by its financial strength ratings.
• 4) Get instant quotes at Insure.com.
• 5) Look at ways to save money on life insurance.

How to buy life insurance

The first step is to calculate how much life insurance your dependents would need.

There are many useful and free life insurance calculators online, including Insure.com's Life Insurance Needs Estimator Tool. Consider the standard of living you want to maintain for your dependents and survivors. Also factor in the debts you have now (such as a mortgage) and the expenses you may have in the future (such as college tuition).

Life insurance is sold in two main forms:

• Term life insurance pays a benefit upon your death without any “cash value” account. It is the least expensive type of life insurance. Term life insurance is available for set periods of time such as 10, 15, 25 or 30 years. As its name suggests, "annual renewable term life" automatically renews itself each year and premiums increase as well. Choose "level term insurance" if you want your premium to stay the same for the duration of the policy. Also available is "decreasing term insurance," where premiums remain level but your death benefit declines over time.

  Choosing a term period is easy: Match the period of time your dependents need your income to the available rate-guarantee periods. For example, if your children are young and you have decades to go on your mortgage, try 30-year term life.

  If you get to the end of your term life insurance policy term and still need life insurance, you'll need to shop for a new policy, which will then be priced based on your age and health status.

  If you buy a term life policy, ask the agent or company to confirm that the policy contains a "guaranteed renewable" option, which grants you the right to continue coverage beyond the initial rate-guarantee period without a medical exam. This feature, found in most term life policies sold today, is extremely important should you become sick and uninsurable toward the end of your rate-guarantee period.

  If you'd like term insurance to cover you for a certain period of time but you're confident you'll outlive the policy, consider a "return of premium" (ROP) term life insurance policy. Under this type of policy, if no death benefit has been paid by the end of your insurance term, all your premiums are refunded (tax-free). Return of premium term life insurance generally costs 50 to 150 percent more than a comparable term policy but it provides a way to hedge your bets no matter what happens.

  Another built-in feature of most term life policies is the right to convert your coverage to any permanent cash value policy that the company offers at current rates without having to take another physical exam. This "guaranteed convertible" feature may be useful in the future if you decide you want permanent life insurance.

• Permanent life insurance has a “cash value” account in which you can build up savings. Permanent life insurance types include whole life, universal life and variable universal life.

  Unlike term life insurance, which is easily compared online, cash value insurance is marketed by agents and brokers in a face-to-face setting, where needs and strategies can be discussed. You'll receive a financial "illustration" of the potential growth of the cash value account, which can run to 15 or more pages. Pay particular attention to the guaranteed death benefit and premium-payment sections, because these columns contain the actual company promises.

  Understand what your beneficiaries will receive if you die. If you have a traditional whole life policy, your beneficiaries receive only the death benefitno matter how much cash value you've built up. Other payout options available for higher premiums are "death benefit plus cash value" and "death benefit plus return of premium."

  Universal life insurance policies allow you to fluctuate or even skip premium payments, which in turn adjusts your death benefit amount.

  Variable life offers a death benefit with a side fund that operates like an investment account. The insurance company invests your premiums and offers you a choice of funds for investment. Returns are not guaranteed and the amount of money your beneficiaries receive and the cash value of your policy depend on how well the underlying accounts perform. Theoretically, the cash value can go down to zero and, if so, the policy will terminate. Some variable life insurance policies will guarantee a minimum death benefit.

  Be aware that many permanent life insurance policies contain harsh penalties for surrendering them in the early years. If you change your mind, it's an expensive decision.

  When your cash value account grows large enough, it can be used by the insurer to pay your premiums for the rest of your life. This is known as being "paid up."

  If you no longer want your permanent life policy, you can surrender it to receive the current cash surrender value or convert it into an annuity, but keep in mind that cashing in a permanent policy after only a few of years is an expensive way to get insurance coverage for a short time.

Life insurance prices

Life insurance prices are based on your life expectancy, the face amount you request and the length of the policy.

Because your current and past health conditions impact your life expectancy, insurers want to know as much as possible about your health condition. Common conditions such as high blood pressure, heart disease, obesity, cancer and depression can all raise your premiums or even result in your being declined if you have multiple conditions. Expect questions in detail regarding your lifestyle, intended foreign travel destinations, your family health history and your personal health history.

Based on your medical history, you'll be grouped into a category such as "preferred plus," "preferred," "standard" and "substandard." Your category ultimately determines your premiums.

Ways to make life insurance more affordable

If you get a price quote for term life insurance but you can't afford it, consider these strategies:

• Reduce your benefit amount or term period in order to reach a price you can afford, then buy additional insurance in the future if more funds become available.
• Buy as much term life insurance as you can afford and supplement with group life insurance through work, if it's available. Group life insurance is the cheapest way to obtain life insurance, but you can't take it with you if you lose or leave your job.
• If your spouse needs life insurance and you have group life through work, find out if you can buy group life for your spouse at the next open enrollment period.