Life insurance provides financial security for dependents when the unexpected happens. This guide outlines policy types, application steps, and planning considerations so you can protect the people who rely on you.
Licensed agents at 1-800-INSURANCE (1-800-467-8726) can explain which carriers and policy structures fit your household.
Reasons Families Buy Life Insurance#
- Replace income to cover daily expenses, mortgage payments, tuition, and future goals.
- Pay final expenses, debts, and estate costs.
- Create an inheritance or charitable gift.
- Support business continuity, buy-sell agreements, or key person protection.
Policy Types#
- Term life: Provides coverage for a set period (10, 20, or 30 years). Premiums are generally lower and coverage is straightforward.
- Whole life: Permanent coverage with guaranteed cash value accumulation and level premiums.
- Universal life: Offers permanent coverage with flexible premiums and death benefits, plus potential cash value growth tied to interest rates or indexes.
- Final expense policies: Smaller permanent policies focused on funeral and end-of-life costs.
Determining Coverage Amounts#
Consider income replacement needs, outstanding debts, future education costs, childcare, and legacy goals. Many households use multiples of annual income as a starting point, then refine with a licensed agent.
Understanding Underwriting#
Carriers evaluate age, health history, lifestyle, occupation, and hobbies. Some policies require medical exams or lab work; others use simplified underwriting with health questionnaires. Providing accurate information keeps coverage enforceable.
Riders and Customization#
Common riders include:
- Accelerated death benefit: Access part of the benefit upon terminal diagnosis.
- Waiver of premium: Keeps the policy in force if the insured becomes disabled.
- Child rider: Provides limited coverage for dependents.
- Guaranteed insurability: Allows future coverage increases without new underwriting.
Coordinating with Financial Plans#
Life insurance works best as part of a broader financial strategy that includes emergency savings, retirement planning, and estate considerations. Beneficiary designations should align with wills or trusts.
Review and Maintenance#
Revisit coverage after major life events—marriage, divorce, home purchases, new children, or income changes. Policy reviews ensure beneficiaries and coverage amounts remain accurate.
Call 1-800-INSURANCE (1-800-467-8726) to compare term and permanent options with a licensed professional.