Life insurance replaces income or covers debts if you die while other people depend on you. Choosing it comes down to four questions: do you need it, what type, how much, and from whom.
1. Decide whether you need it
You likely need coverage if someone relies on your income or unpaid work, such as a partner, children or a relative, or if you have debts like a co-signed loan or mortgage that would fall on someone else. Single people with no dependents and no shared debts may need little or none.
2. Pick a type
- Term life: covers a set period (often 10, 20 or 30 years). Usually the lowest cost per dollar of coverage.
- Permanent life (whole, universal and others): lasts for life as long as premiums are paid and builds cash value, at a much higher cost.
For most families whose main goal is protecting income while children are young or a mortgage is outstanding, term coverage is the common starting point.
3. Estimate how much
Add up what your family would need: years of income replacement, the mortgage and other debts, childcare, future education, and final expenses. Subtract savings and any existing coverage, such as a workplace policy. Our free Life Insurance Needs Calculator walks through this.
4. Compare quotes the right way
- Compare the same coverage amount, term length and riders across several insurers.
- Check each insurer's financial strength rating from an independent rating agency.
- Read what's excluded and how the medical exam or questionnaire works.
- Confirm the agent or broker is licensed in your state.
5. Review it regularly
Review coverage after big life events: marriage, a new child, a home purchase, a divorce or a large raise. Keep beneficiaries up to date, because the beneficiary form usually overrides a will.
General information only, not insurance advice and not a recommendation of any insurer or policy. Coverage rules and prices vary by state and by insurer, so confirm details with a licensed agent or your state insurance department.