The process of determining how much life insurance is enough is no easy task. The most important factor in determining the appropriate size of life insurance is your family's standard of living and lifestyle. Be sure that they are at the forefront of your mind when discussing life insurance size. Obviously, you will need to balance life insurance size with life insurance costs, and that is where the type of life insurance you choose can make a big difference.

The three most common types of life insurance are term, permanent and some combination of the two. Term life policies are generally more inexpensive but only provide life insurance coverage until a specific age. These life insurance policies have a one-time payment benefit. Permanent policies provide coverage until death. These life insurance policies can include both one-time payment benefits or cash savings accounts.

The life insurance premium will be based on a number of factors including the type and size of life insurance applied for and the likelihood of death. Life insurance companies will also likely look at your age, gender, lifestyle and medical history when trying to set a life insurance rate.