Personal Finance Insider writes about products, strategies and tips to help you make smart decisions with your money. We may receive a small commission from our partners, but our reports and recommendations are always independent and objective. Thirteen years ago, one of the first things my husband and I did after getting married was the purchase of life insurance policies for both of us. Outside of a will, purchasing life insurance policies was the most important thing we did to provide for our family in the event of an unexpected accident or illness. Well over a decade later, we are confident that we made the right decision back then and have continued to increase our coverage to protect our family. Here's what our decisions went when we purchased life insurance. Choosing a Life Insurance Company The life insurance companies that offered coverage were overwhelming, so we went with the insurance company that we used for our car and homeowners insurance. There is often a discount for having multiple policies with one company, and it was logical to group our insurance policies together. In terms of the cost of our premium, or monthly payments, we were young and healthy and most of the quotes were quite similar, which made the decision easier. When we were ready to purchase a policy, we sat down with our insurance agent and he patiently answered all our questions. Deciding on the whole life compared to the duration We went back and forth discussing what type of insurance to obtain and in the end we decided on long-term insurance. Whole life insurance does not have an expiration date, but the cost of the policy was several times higher than a time policy. When we purchased our policy for the first time, we were in our twenties with no health conditions and we qualified for a very low rate, so we decided to buy a 30-year policy. We ended up buying two $ 300,000 policies that cost us less than $ 25 a month. A full life policy would cost us over $ 100 every month for about the same coverage. Ten years later, we reviewed our finances and decided to buy another 30-year economic policy. We purchased two policies for $ 400,000 each for less than $ 50 a month. This brings our life insurance total to $ 700,000 each. Both policies are even less expensive than the first entire life insurance policy we have reviewed. It is likely that we will continue to stack our insurance policies as long as this is beneficial for us. While some view life insurance as an investment opportunity, we see it as a risk management tool. All the money we would have spent on a whole life insurance policy was directed to our pension funds. We believe that we are saving at least $ 1,200 per year in our retirement accounts which, over the next 30-40 years, will offer us a better rate of return. Understanding How Much Coverage We Need When deciding how much to spend on our life insurance, we opted to purchase policies worth 10 times our annual salaries. When we purchased our second set of policies, we kept the same number. As our wages had gone up, our coverage had to go up too. Life insurance is important to have at any age, but we wanted to make sure that if something happened to any of us in advance, we could pay to cover any funeral expenses, pay our mortgage, put our kids in college and have a pillow with any remaining funds. For us, life insurance is a tool that we use, in addition to being debt-free and investing in our pension funds, to create financial stability. Our hope is that we will never have to cash in on a life insurance policy, but less than the cost of an elegant dinner and a movie every month, we have peace of mind.