Cash-Value Products

There are generally two kinds of life insurance: term coverage that pays out for a specified time period, and permanent coverage that builds...

There are generally two kinds of life insurance: term coverage that pays out for a specified time period, and permanent coverage that builds up a cash value, much like an investment. Although some may get tax advantages from permanent life policies, consumer advocates say term coverage makes better financial sense for most people.

 "If you're not being told by a tax accountant to consider some cash-value product, you probably don't need it," CFA's Hunter says. "There are much better and lower-cost ways to invest" than through your life insurance policy, says adviser Knox.