Why people buy life insurance
- Replace income your family relies on for everyday bills.
- Pay off a mortgage or other debts so they don’t pass to loved ones.
- Fund future costs such as college tuition or caring for a parent.
- Cover funeral and final expenses.
- Leave an inheritance or a gift to a charity.
- Protect a business, for example through a buy-sell agreement or key-person coverage.
The main types of life insurance
Most policies are either term (coverage for a set number of years) or permanent (coverage for life, with cash value that builds over time). Here’s how they compare.
| Term life | Whole life | Universal life | |
|---|---|---|---|
| How long it lasts | 10 to 30 years, typically | Your whole life | Your whole life, if premiums are kept up |
| Cost | Lowest cost per dollar of coverage | Highest; premiums stay level | In between; premiums can be adjusted |
| Cash value | None | Yes, with a guaranteed growth rate | Yes, growth depends on the policy type |
| Good for | Covering working years, a mortgage or raising children | Lifelong coverage and steady, predictable savings | Lifelong coverage with flexibility |
How much life insurance do you need?
A common starting point is 10 to 15 times your yearly income, but your real number depends on your situation. Add up what your family would need: debts and the mortgage, years of income to replace, future costs like college, and final expenses. Then subtract savings and any coverage you already have, such as a policy through work.
Your agent will walk through these numbers with you as part of your quote. There’s no obligation to buy.
What affects the price
- Age: the younger you are when you buy, the lower the price.
- Health and medical history, including height, weight and medications.
- Tobacco and nicotine use.
- The amount of coverage and, for term life, the number of years.
- Some jobs and hobbies, such as piloting or scuba diving.
How it works with us
- Get a quote: tell us about yourself and the coverage you want.
- Compare: a licensed agent shows you options from several insurance companies.
- Apply: your agent helps you complete the application and answers your questions.
- Approval: the insurance company reviews your application. Some policies need a short phone interview or a quick medical exam.
Common questions
Is life insurance taxable?
The death benefit is generally not subject to federal income tax for your beneficiaries. There are exceptions, and estate taxes can apply to large estates, so ask a tax professional about your situation.
Do I need a medical exam?
Not always. Many insurance companies offer some policies without an exam, based on your answers and records. Others ask for a short exam that a nurse can do at your home or office, at no cost to you.
Can I have more than one life insurance policy?
Yes. Many people have a policy through work plus a personal policy. A personal policy stays with you if you change jobs.
How long does it take to get covered?
It depends on the insurance company and the policy. Some decisions come within days; policies that need an exam or medical records can take several weeks.