Students who are looking at permanent insurance need to ask themselves several important questions:

Can I commit to the premiums over the long-term? Many students are still in school; most have no prospective job opportunities and will likely be in school for many more years. With permanent insurance, you are committing to make payments, regardless of whether you are in school or not or whether you have a job or not. Can you really commit to these payments now?

Do I need the tax benefits now? Once you get out of school, purchasing term insurance and investing the remainder in a Roth IRA or 401(k) may be cheaper and better for you in the long run because you will not have to pay high insurance charges with these products, and you can invest more for retirement. Qualified savings plans and retirement plans do not provide life insurance, but you may still want to consider putting your investment dollars into these plans before you get the more expensive life insurance products.

Are the rates of return on these insurance products guaranteed? Generally, the answer is no. Be careful of people who are selling products that they do not understand. Because the commissions on these products are very high, some people may be selling products they don’t understand to clients who don’t need them.

Do I have a history of medical problems that would preclude my ability to get life insurance? If this is the case, you might want to look into permanent insurance or convertible twenty or thirty year term insurance.

For most students, “buy term and invest the rest” is an appropriate insurance strategy for this time in their lives. It means to buy a term policy which is level term for 10 to 20 years with a convertibility option to permanent insurance. Then take the additional money you might have spent for permanent insurance and invest that in either a Roth or traditional IRA or qualified retirement plan.