It's unpleasant to think about, but determining your life insurance needs should be a practical exercise, not an emotional one. Having enough life insurance is an essential step in protecting your financial plans. Otherwise a death in the family could quickly eat up the money you've worked for years to save.

But some people make big mistakes when buying life insurance, like not buying enough, getting the wrong kind of coverage or paying much more than necessary. These tips will help you choose the life insurance that's best for you and your family.

Shop Around for the Best Policy

If anyone depends on you financially, you should probably have life insurance. It's a good idea to buy an individual policy in addition to any employer coverage, so you'll still have insurance if you leave your job.

And you'll probably pay much less than you'd expect. For less than $400 per year, a healthy 40-year-old man could buy a $500,000 term policy that locks in level premiums for 20 years. That's a huge price drop over the past decade -- the same policy would have cost at least $995 per year in 1994, says Byron Udell, CEO of online insurance brokerage AccuQuote.com. Several factors have contributed to this significant reduction in term life insurance rates. People are living longer, and insurance companies and regulators recently updated their mortality tables for the first time in more that 20 years to account for these increased life expectancies.

But the primary reason for these lower rates is that insurers are doing a better job of assessing risk. They've increased the number of rate classes and are making distinctions on premiums based on factors like cholesterol, blood pressure, driving record, height and weight, as well as looking at medical history and family history. People are also getting more credit for being exceptionally healthy, and it's those people -- often called the "superpreferred" rate class -- who have experienced the biggest rate drop.

So it's a good time to shop around even if you already have a policy. You may be able to lower your premiums or lock in the same rate for a longer period of time. You can easily compare costs on the Web. Sites such as AccuQuote.com, InsWeb.com and Insure.com provide instant price quotes from several companies. These sites ask several questions about your health, hobbies and family medical history, which help determine your policy cost. Web sites that ask fewer questions may give you inaccurate quotes; you won't know the exact price until you take a medical exam. If you have any major medical conditions, call the site or an agent rather than filling out the online quote form.

Review Your Policy Regularly

It's also a good idea to revisit your insurance policy every few years. You may need to boost your coverage if you get a higher-paying job, bigger mortgage or have more children. A general rule of thumb is to buy eight to 10 times your income. Go for the higher end if you're the sole breadwinner with several young children; the lower end should be sufficient if both spouses work and you have older children, a smaller mortgage and a good start on college savings.

Kiplinger's insurance-needs calculator can help you determine how much coverage to buy. Don't forget to buy insurance for a stay-at-home parent. It could cost a lot to pay for child care if your spouse were to die.