"Those who plan do better than those who do not plan even though they rarely stick to their plan." -- Winston Churchill

It may sound obvious that you should create a life insurance plan, but it would surprise you how many people enter the life insurance buying process without a plan. Failing to create an adequate life insurance plan can cost you.

For example, if you are sold a policy with a $1, 000, 000.00 death benefit when a carefully thought out life insurance plan would have revealed that you only needed $500, 000.00 of coverage, you would have spent significantly more than needed for adequate protection. That is money wasted on premiums that could have been used to invest, or used to enjoy your life now.

Another potential consequence of failing to plan is that, in the event of your untimely death, the proceeds from the policy could end up in probate court or end up being squandered away by beneficiaries unskilled in money matters-both costly symptoms of inadequate planning.

How do you create a life insurance plan? It's not hard, but you will need to answer several questions, determine your needs based on the answers, and write it all down. Here are the basic questions you need to answer:

1. Do I need life insurance?

2. How much coverage is needed?

3. How long will the coverage be needed?

4. What kind of life insurance policy is needed?

5. Who should benefit from the policy?

6. How should the death benefit be distributed?

How you answer each question will affect what you pay in premiums and ultimately how successful your life insurance plan will be at meeting your goals.