The short answer is: it depends.Life insurance is designed to provide financial support to the people who would be affected financially if you died. If someone depends on your income, your services, or your financial support, life insurance may be an important part of your financial plan.Consider whether someone would have difficulty paying for:Mortgage or rentEveryday living expensesChildcare or educationOutstanding debtsFinal expensesOther financial obligations you currently help supportYou may also have a need for coverage even if you don't have children. A spouse, aging parent, business partner, or someone else who depends on you financially may be affected by your death.A simple way to think about itIf your death would create a financial problem for someone else, it's worth considering whether life insurance should be part of your plan.The question isn't necessarily “Do I need life insurance?”It's:“Who would be financially affected if I weren't here, and how would they manage without my income or financial support?”That's the starting point for determining whether you need coverage, how much you may need, and how long you need it.NAIC Life Insurance Consumer Guide

Life insurance isn't about expecting the worst. It's about protecting the people and financial plans that depend on you.If you die, the financial obligations you leave behind don't disappear. The people you leave behind may still have to deal with:Mortgage or rent paymentsEveryday living expensesOutstanding debtsChildcare or education costsFinal expensesOther financial obligations you currently help supportLife insurance provides a death benefit to the beneficiaries you choose, which can help them manage those financial responsibilities.It's also about protecting what you've builtLife insurance can help your family avoid having to immediately:Sell a homeDrain savings or retirement accountsTake on additional debtGive up long-term financial goalsThe amount of coverage you need depends on your circumstances. Consider how much income you provide, who depends on you financially, your debts and expenses, and what you want to leave behind. Life insurance isn't about buying the most coverage possible. It's about making sure the people who depend on you aren't left with a financial problem they can't afford to solve.

There isn't one type of person who needs life insurance. The better question is whether someone else would face a financial hardship if you died.Life insurance may be worth considering if you are:Parents & FamiliesIf your family depends on your income—or even part of it—life insurance can help replace that income and keep financial goals on track.HomeownersA mortgage doesn't disappear when someone dies. Life insurance can help provide the funds needed to continue making mortgage payments or pay off the mortgage, depending on the family's needs.Business Owners & Self-Employed ProfessionalsYour death could affect more than your family. Life insurance may help address business obligations, protect business partners, or provide funds for a buy-sell agreement when properly structured.Single ProfessionalsYou may not have children or a spouse, but you could still have debts, financial obligations, or family members who depend on you.Anyone With People Who Depend on ThemDependence isn't always about a paycheck. Someone may depend on you for housing, financial support, childcare, or other ongoing assistance.Anyone Planning AheadLife insurance generally costs less when you're younger and healthier. Waiting until you have a greater need—or a change in health—can affect your options and cost.The key question isn't your age, marital status, or whether you have children. It's this:“Who would be financially affected if I weren't here?”

Employer-provided life insurance can be a great benefit, especially when it's provided at little or no cost. If your employer offers it, we generally recommend taking advantage of it.But there's an important distinction:Your employer's life insurance should usually be viewed as additional coverage—not necessarily your entire life insurance plan.Why Keep Individual Coverage Too?Your job can change.You may leave the company, change careers, retire, or become self-employed. Your employer-sponsored coverage may not continue under the same terms.Your coverage may change if you're no longer on payroll.Extended medical leave, family leave, a sabbatical, or another period away from active employment could affect your eligibility, depending on your employer's plan.You may lose the group rate.Group coverage is priced based on the employer's group arrangement. If you leave the group and are allowed to continue coverage, the cost may be substantially different.Your individual policy stays separate from your employer.An individual policy isn't dependent on staying with a particular employer. That can give you a layer of protection that follows you through career changes and retirement.What About Living Benefits?Employer group coverage may not provide the same features available through an individual policy. If living benefits are important to you, find out exactly what your employer's plan provides and compare it with your individual coverage options.The Bottom LineIf your employer gives you life insurance for free or at a low cost, take it. But don't assume it's enough.Think of your employer coverage as one piece of the puzzle and your individual life insurance as the coverage you control regardless of where you work.Consider Coverage Outside of WorkA personal life insurance policy can provide coverage that is separate from your employment and can be designed around your individual financial needs.Don't assume your employer's life insurance is enough simply because you have it.Compare the coverage you have with what your family would actually need—and understand what happens to that coverage if your employment changes.

If you die without life insurance, the financial responsibilities you currently handle don't simply disappear. They may fall on your spouse, family, business partners, or other people who depend on you.They may have to find a way to cover:Mortgage or rent paymentsEveryday living expensesOutstanding debtsChildcare or education costsFinal expensesBusiness or other financial obligationsYour Savings May Not Be EnoughWithout life insurance, your family may have to use savings or retirement accounts to cover expenses. Depending on the circumstances, that can mean losing money that was intended for other financial goals.Your Home Could Be at RiskIf your family depends on your income to make the mortgage payment, losing that income could make keeping the home more difficult.Life insurance can provide funds that help your family continue making payments or pay off the mortgage, depending on the amount of coverage and the family's needs.Your Family May Need TimeLife insurance isn't just about paying bills. It can give your family time to adjust financially without having to immediately make major decisions because the money you provided is gone.The question isn't whether your family could survive without you. It's whether they could maintain their financial stability without your income and support.That's the risk life insurance is designed to help address.

There isn't a single number that works for everyone. The right amount depends on what you want the insurance to accomplish, who you want to protect, and how long you want the money to last.Replace Your IncomeIf your family depends on your income, don't just think about replacing this year's income.Ask yourself:“How many years would I want this money to support my family if my income disappeared tomorrow?”Maybe you want the money to provide income until your children are grown, until your spouse reaches retirement, or until another financial milestone is reached.A common starting point is 10–15 times your annual income, but that's only a starting point. Your actual needs could be significantly different.Pay Off the Mortgage or Other DebtsYou may want enough coverage to eliminate a mortgage, car loans, credit cards, or other debts so your family doesn't have to use their income to make those payments.But paying off debt doesn't necessarily have to be the goal. You may decide that keeping the debt and using the insurance proceeds for income replacement or another financial goal makes more sense.Fund Future EducationLife insurance can also be part of a plan to provide money for your children's or grandchildren's future education.Think beyond today's expenses:“What would I want to be able to provide for them if I weren't here to help?”Create an InheritanceLife insurance doesn't have to be used only to replace income or pay bills.You may want to leave money to your children, grandchildren, spouse, or another loved one as an inheritance.That goal could require a very different amount of coverage than simply paying off your current debts.Provide Capital for a Future BusinessPerhaps you want to give a child or another family member the financial resources to start or purchase a business someday.Life insurance can potentially provide the capital needed to help make that future goal possible.Consider Your Existing ResourcesYour life insurance needs should also take into account what you already have:Savings and investmentsRetirement accountsExisting life insuranceOther assetsYour spouse's or partner's incomeOther sources of financial supportThink Beyond the NumbersThe question isn't simply:“How much money does my family need today?”It's:“If I weren't here, what would I want this money to accomplish—and how long would I want it to last?”Maybe it's replacing your income for 5 years, 20 years, or longer. Maybe it's paying off the mortgage, funding a child's education, creating an inheritance, or providing capital for a future business.The right amount of life insurance is ultimately tied to your goals, not just your current expenses.Life insurance keeps the future goals, plans, and dreams you made before you left this world alive—even if you aren't here to see them happen.

There are two broad types of life insurance: term life insurance and permanent life insurance. Understanding how they work can help you decide what type of coverage fits your goals.Term Life InsuranceTerm life insurance provides coverage for a specified period of time. Common terms include 10, 20, or 30 years, but term insurance isn't necessarily limited to those time periods.Term insurance is designed to protect you during the years when your financial responsibilities are often growing faster than your savings.Think about the years when you're:Getting marriedStarting a familyBuying a homeRaising childrenBuilding your careerTaking on mortgages and other debtsWorking toward long-term financial goalsDuring these years, you may have a lot to protect but haven't yet had enough time to build substantial savings and investments.If you were to die prematurely, term life insurance can provide the financial resources your family would otherwise have to replace.The Goal of Term InsuranceIdeally, as you move through life, your financial picture changes.You may eventually:Build significant savings and investmentsPay down or eliminate your mortgageRaise your childrenAccumulate retirement assetsBuild other sources of incomeReach a point where your family could continue financially without your paycheckThis is the basic philosophy behind term insurance:Protect your family during the years they need you most, while you build the financial resources that can eventually provide that protection yourself.This is also why some people follow a “buy term and invest the difference” approach—using affordable term insurance for protection while directing additional money toward savings and investments.Term Insurance Can Have Additional FeaturesTerm insurance isn't necessarily just a 20- or 30-year policy with no additional benefits.Depending on the policy and insurance company, term coverage may offer features such as:Living benefits — The Primerica term policy I offer automatically includes living benefits, which can provide access to a portion of the death benefit under qualifying circumstances while you're still living.Extension options — Certain policies may allow coverage to be extended without requiring a new medical exam, subject to the policy's terms and conditions.Increasing term — Coverage can be structured to increase over time.Decreasing term — Coverage can decrease over time, which can be useful when the financial obligation you're protecting is also declining.Longer-duration coverage — Certain term policies can provide coverage extending to age 100 rather than simply ending after 20 or 30 years.Features, availability, costs, and eligibility requirements vary by policy and insurance company.What Happens If You Die During the Term?If you die while your term policy is in force, your beneficiaries receive the death benefit specified in the policy, subject to the policy's terms and conditions.That's the purpose of the coverage: to provide the financial resources your family needs when they need them most.What Happens If You Outlive the Term?If you outlive a traditional term policy, the policy reaches the end of its term and generally does not have cash value for you to collect.That's part of the trade-off: term insurance is generally less expensive because you're purchasing life insurance protection for a defined period, rather than a policy designed to accumulate cash value.Permanent Life InsurancePermanent life insurance is designed to provide coverage for your entire life, as long as the policy remains in force. Some types of permanent insurance also accumulate cash value.Permanent insurance can be used for different objectives, including:Lifetime protectionEstate planningLegacy or inheritance goalsOther long-term financial strategiesPermanent insurance generally costs more than term insurance and serves a different purpose.What Happens to the Cash Value When You Die?This is an important distinction that many people don't realize.With a typical permanent life insurance policy, the cash value is not simply added to the death benefit and paid to your beneficiaries. Generally, the beneficiary receives the policy's death benefit while the insurer retains the cash value, subject to the specific policy provisions.There are different types of permanent policies and policy structures, so it's important to understand exactly how the policy you're considering works.What If You Live to 100?With permanent insurance, the policy is designed to remain in force for life, but that doesn't mean the cash value is simply guaranteed to grow indefinitely.Depending on the policy, insurance costs and other policy charges can affect the cash value, and the policy's performance can determine whether it remains adequately funded.That's why it's important to understand not only how much cash value a policy may build, but also how the policy is funded and what costs can affect it over time.Term Insurance and Building WealthThe philosophy behind term insurance is that you use insurance to protect your family while you're building your own financial resources.Over 20 or 30 years, you may accumulate enough savings and investments that your family no longer needs a large insurance policy to replace your income.The goal is eventually to reach a point where your assets can provide the protection that insurance once provided.The goal isn't necessarily to have life insurance forever. The goal is to protect the people you love while you're building the financial foundation that will eventually protect them without it.And ultimately:Life insurance isn't just about protecting what you have today. It's about protecting the future you were working to build.

Having investments, rental properties, or other assets can certainly reduce the amount of life insurance you need. But having assets isn't necessarily the same as having enough available resources to replace the financial support you provide.What About My Investments?You might say:“I have $500,000 in investments. My family will have that money if I die, so why do I need life insurance?”The question is: What was that $500,000 supposed to do?If those investments are part of your retirement plan, your family may have to use some or all of them to replace your income or cover expenses.Now the investments you spent years building for future retirement income may no longer be available for that purpose.Life insurance can provide a separate source of money for your family while allowing your investments to remain invested for their intended purpose.What About Rental Properties?Rental properties are another form of wealth, but they're not necessarily the same as having money available to replace your income.Your beneficiaries could:Sell the propertiesBorrow against themContinue renting them and use the rental incomeKeep them as an inheritanceBut each choice has consequences.If your rental properties generate enough income to completely replace the income you provide to your family, that's worth considering. But if you're still working because the rental income isn't enough to support your lifestyle, your family may face that same income gap if you die.What About Other Assets?The same principle applies to other assets you may have.A business, investment account, real estate, or other property may have substantial value, but value and usable income aren't always the same thing.Ask yourself:“If I died tomorrow, could my family maintain the financial life I've helped provide without having to sell or spend down the assets I've spent years building?”Assets vs. Financial IndependenceThe question isn't simply:“Do I have assets?”It's:“Could my family continue financially without having to disrupt the plans those assets were intended to accomplish?”Life insurance can provide an additional source of funds at the exact time your family loses your income and support.Even Wealthy People May Use Life InsuranceHaving substantial wealth doesn't automatically eliminate the need for life insurance. It can simply change what the insurance is being used for.For some people, life insurance may be used to help with:Preserving assets for heirsProviding liquidityInheritanceEstate planningBusiness planningProviding funds without requiring other assets to be soldLife insurance isn't only about protecting people who don't have money. It can also help protect the money you've worked hard to build.The goal isn't to buy insurance simply because you have assets. It's to understand what your assets are intended to accomplish and determine whether life insurance can help keep those plans intact.

Not necessarily. When we complete the application, you and I can decide whether you want to voluntarily undergo the medical exam, when that option is available.So why would you choose to take the exam if you don't have to?No Exam Usually Means a Higher RateWhen you choose not to have the medical exam, the insurance company has less information about your actual health.That means the insurer is taking on more uncertainty and potentially more risk, which can result in a higher premium.Choosing to take the exam gives the insurance company additional information about your health and may allow you to qualify for a better rate, depending on the results and the insurer's underwriting guidelines.What Does the Exam Involve?If you choose to take the exam, it may include:Height and weightBlood pressureMedical history questionsBlood or urine samplesOther basic health informationThe exact requirements depend on the insurance company and your application.So Which Should You Choose?There's no automatic right answer.You might decide that convenience is more important and choose not to have the exam, even if that means paying a higher premium.Or you may decide that spending a little time completing the exam is worthwhile if it gives you the opportunity to qualify for a lower rate.We'll look at your situation together and decide which approach makes the most sense.The medical exam isn't necessarily something you have to do. It's another piece of information that can potentially work in your favor when the insurance company determines your rate.

Applying for life insurance isn't simply filling out a form and waiting for an answer. The application starts the underwriting process, where the insurance company reviews your information and determines whether it can offer coverage and at what rate.Step 1: We Complete the ApplicationWe start by discussing how much coverage you want, what you're trying to accomplish, and the type of policy that fits your needs.The application asks about things such as:Personal informationHealth historyCurrent medicationsLifestyle and activitiesExisting insuranceFinancial informationBankruptcy and other financial historyIllegal or criminal activityOther information that may affect underwritingThe questions can be detailed. Answer every question honestly and completely. If you're unsure how to answer something, ask me before submitting the application rather than guessing.Step 2: Decide Whether to Take the Medical ExamWhen the medical exam is optional, you and I can decide whether taking it makes sense for you.Choosing not to take the exam may result in a higher premium because the insurance company has less information about your health.Taking the exam provides additional information that may help you qualify for a better rate, depending on the underwriting results.Step 3: The Initial Deposit Can Put Coverage in ForceOnce the application is completed, an upfront deposit—not simply a payment—may be required to bind the contract and put coverage in force while the application goes through underwriting, subject to the insurance company's requirements.This is an important distinction.The underwriting decision has not been made yet. The insurance company is still reviewing your application, but the required deposit can provide coverage during that process.If the required deposit is made and the coverage is bound, you may have coverage during the underwriting process. For example, if you were to die shortly after submitting the application, your beneficiary could receive the applicable death benefit according to the temporary coverage and carrier's terms.Without the required deposit, there is no coverage during the underwriting period.Step 4: The Underwriter Reviews Your ApplicationThe underwriter reviews the information you've provided and may request additional information, such as:Medical recordsPrescription historyAdditional financial informationOther documentationThe underwriter then determines what the insurance company is willing to offer.Step 5: The Underwriter Makes a DecisionThere are several possible outcomes:Approved as submittedThe policy is approved under the original terms.Approved with changesThe insurance company may offer different coverage or a different rate. The rate could be higher or lower than originally anticipated.DeclinedThe insurance company determines that it cannot offer coverage. If the application is declined during underwriting, the deposit is returned according to the carrier's requirements.Step 6: You Decide Whether to Accept the Final OfferAn underwriting decision isn't necessarily the end of the conversation.If the insurance company offers coverage with changes, you have an opportunity to review those changes and decide whether you want to proceed.If you're approved, you may also have the opportunity to make changes to the coverage before the policy is finalized, depending on the carrier's rules.You may decide that you want:More or less coverageA different termDifferent policy optionsThe goal isn't simply to get approved. It's to end up with coverage that makes sense for you, at a price you're comfortable with, and that accomplishes what you originally wanted the insurance to do.