BABY BOOMERS ARE

suddenly discovering a whole new kind of "senior moment," an instant where you're not sure whether to feel incredibly old or eternally young. This is what happens when you live longer than past generations and act like you're going to live forever: You look around and realize you're the only person in your cardio class with gray hair. You find yourself surrounded by raving twentysomethings at the U2 concert you're attending with your husband. You open your life-insurance bill.

That's right, life insurance. As you near retirement age, it will either run out or get more expensive. But it will still be available. Mortality tables, which insurance companies consult to find out how long they can expect various kinds of customers to live, used to assume everyone would be dead before their 100th birthday. But beginning next year, all insurers will use new tables that extend to age 120. Which ought to make you wonder how long to stick with their products.

Many retirement- and estate-planning guides offer just brief advice about life insurance, as in, "Make sure you have enough." And by and large, the life-insurance industry only makes matters worse. In the late 1990s, half a dozen of the nation's biggest insurers had to settle class-action lawsuits with their policyholders over issues related to deceptive sales pitches. State governments (which regulate insurance) fined another batch for similar practices. (Bad citizen awards: MetLife and Prudential fell into both groups.) Despite these scandals, there's still no unit pricing in life insurance in other words, you can't tell from a typical policy just how much each dollar of coverage costs you. And now there are a variety of newfangled and confusingly named products on the market for graying boomers, from "return-of-premium policies" to "senior life insurance" to "life settlements."

A couple of quick definitions so you can start sorting through this thicket: Term life insurance offers a death benefit and nothing more; you pay a defined price (your premium) over a specified length of time (the term), and you know exactly what your heirs will get if you fall down an elevator shaft next week (the amount for which you are insured). All other forms of life insurance, including whole, universal and variable, are more complicated. With these policies, your insurer invests part of your premiums, then credits you with dividends. So these policies build a cash value, which grows tax-free, while also providing financial protection against death.

Companies use documents called policy illustrations to sell life insurance. But when you buy cash-value insurance, here's what almost never gets illustrated: where your premiums go, how much of your insurer's investing gains you'll get back or the fees you'll pay. So experts often say "buy term and invest the rest" buy death coverage, and put the rest of your money into more transparent securities. But what happens when you outlive the term?

If you did the smart thing and purchased 10- or 20-year term insurance at the height of your earning power and are now nearing retirement, you'll soon face the question of whether to re-up. And retirement planners say that's just one of the life-insurance issues they're hearing about these days. In other cases, workers who had life insurance through their employers have been left without coverage by downsizing or changing to part-time jobs. In still others, consumers bought cash-value policies thinking their premiums would vanish once their dividends exceeded their bills, but are still on the hook for annual payments.

To make sense of these or similar situations, ask yourself one fundamental question: Will your death cause unmanageable financial hardship for the people you leave behind? Odds are you have more savings and fewer people relying on them today than earlier in life, so you may not need to hedge against death at all. "The traditional, old-fashioned reason to buy life insurance is to replace earnings," says Joseph Belth, editor of the Insurance Forum in Ellettsville, Ind. "By the time you are retired, you are supposed to have accumulated some reserves, and presumably, your children are independent."

In some cases, however, it may be important to maintain your policy or acquire new coverage. If you are still caring for family members or paying college expenses for grandchildren, for example, you'll probably want term life insurance lasting through the period of your obligations. If your estate will trigger estate taxes but is illiquid consisting mostly of property, say, or a closely held business then whole-life insurance can provide your heirs with the cash they'll need to pay off Uncle Sam after you're gone. And if life insurance has always been part of your estate planning, you should keep it in force and consider transferring it to a trust, with your heirs as the trustees. They will pay the premiums and collect on the policy when you die.

Most important, if you already own some kind of cash-value insurance, don't give it up. Agent commissions and surrender charges (the penalties you pay to cash out a policy) drop steeply after the first few years of a whole- or universal-life policy. So by the time you're 15 or 20 years into such insurance, your premiums primarily go toward building its cash value. For example, Northwestern Mutual, which offers some of the best bang for the buck in the industry, has been paying whole-life dividends of about 7.5% a year since 2004 a nice deal when the money goes to you, not your insurance agent, especially since it's tax-free.

Further, avoid "life settlements" at all costs. The life-settlement industry has sprung up in recent years to offer aging Americans cash in exchange for their life-insurance policies and is pockmarked with raw deals. Seniors who sell their insurance to life-settlement companies get an average of just 20 cents for every dollar of death benefits, or less than one-third of what those policies are actually worth, according to a 2005 study by Deloitte Consulting and the University of Connecticut. It's better to do almost anything else if you need cash pawn your furniture if you have to than to sell your life insurance.

But don't buy new life insurance just because you've always had it. And don't start up a new policy or expand your coverage just because it's dawning on you that your estate isn't going to be as big as you might have hoped. As you get older, the price of life insurance skyrockets. And if you've accumulated enough assets that your loved ones can manage without you, you don't need to keep paying. "We often associate the term 'decision regret' with stock investing, but it applies to buying, or not buying, life insurance as well," says Harold Skipper, former professor of risk management and insurance at Georgia State University. "You have to try to make decisions as a rational person. You can't just worry about what might happen if things go wrong."

To pay for your funeral and related bills, you can purchase a small policy that covers the direct costs of your death. This is often called "senior life" or "final expense" insurance, and typically goes as high as $25,000. And if you're convinced you need a cash-value policy for estate planning purposes (if you're over 50, you won't have enough time to make the cash buildup aspect worthwhile for yourself), you can get help at EvaluateLifeInsurance.org, a web site run by James Hunt, an actuary for the Consumer Federation of America. In general, though, if the meter has run out on your life insurance, think twice before dropping any more dimes.