when calculating your expenses it is best to overestimate your needs a little for instance the needs approach will consider any outstanding debts and obligations that should be covered such as a mortgage or car payments the needs approach also recognizes that the need for income replacement may gradually decline as children living at home move away or if a spouse remarries 
the needs approach contrasts with the human life approach the human life approach calculates the amount of life insurance a family will need based on the financial loss the family would incur if the insured person were to pass away today the human life approach usually takes into account factors such as the insured individual s age gender planned retirement age occupation annual wage and employment benefits as well as the personal and financial information of the spouse and any dependent children types of life insurancelife insurance provides financial protection to surviving dependents in case of the death of an insured as with other forms of insurance life insurance is a contract between an insurer and a policyholder in life insurance the insurer guarantees payment of a death benefit to named beneficiaries various types of life insurance approaches exist including the needs approach and the human life approach whole life term life universal life and variable universal life vul policies are separate types of plans available to individuals and their families whole life also known as traditional or permanent life covers the duration of the life of the insured in addition to providing a death benefit whole life also contains a savings component where cash value may accumulate term life guarantees payment of a death benefit during a specified term unlike whole life after the term expires the policyholder can renew for another term convert to permanent whole life coverage or let the policy terminate universal life is similar to whole life insurance yet it provides an additional investment savings element and low premiums like term life insurance most universal life insurance policies contain a flexible premium option although some require a single premium single lump sum premium or fixed premiums scheduled fixed premiums finally variable universal life or vul is a permanent life policy with a built in savings component which allows for the investment of the cash value like standard universal life the vul premium is flexible 