- Life insurance helps protect the people who depend on you.
- Term coverage lasts a set period; permanent coverage is designed to last for life.
- A needs-based estimate is more personal than a simple income multiple.
- Workplace coverage is helpful but often not enough on its own.
What life insurance does
A life insurance policy is a contract that pays money to the people you choose, called your beneficiaries, when you pass away. That money can help them cover a mortgage, day-to-day living costs, childcare and debts, and help fund future goals like college. For many families, it is the safety net that keeps a loss from also becoming a financial crisis.
Who may need it
Life insurance is worth considering if anyone depends on your income or the work you do at home. That often includes parents with young children, homeowners with a mortgage, business owners and people caring for aging parents. If no one relies on you financially, you may need less coverage, or none at all.
Term vs. permanent coverage
Term life insurance covers you for a set period, such as 10, 20 or 30 years. It is usually the most economical way to get a significant amount of coverage during the years your family needs it most. Permanent life insurance, such as whole life and universal life, is designed to last your entire life and can build cash value. It usually costs more than term, and it can play a role in estate planning and other long-term goals. Each type has pros and cons, and the right choice depends on your situation and budget.
How much coverage do you need?
Some people start with a multiple of their income as a rough guide. A more personal approach adds up what your family would need: paying off debts, replacing your income for several years, future costs like college, and final expenses. Then subtract your savings and any coverage you already have, such as a policy through work.
Coverage through work
Many employers offer group life insurance. It is a helpful benefit, but the coverage is often modest and does not always follow you if you change jobs. It is worth checking whether it is enough on its own.
Common mistakes
- Assuming your health will always let you buy coverage later
- Relying only on a workplace policy
- Buying too little coverage
- Not updating beneficiaries after a marriage, divorce or the birth of a child
Your next step
The right coverage depends on your family, your finances and your goals. To talk through what makes sense for you, request a free consultation.
Is your family protected?
We can review what you have today and whether it fits what your family would need.