Life Insurance
Coverage that keeps your family's life on its feet if your income stops. Here is how term life insurance works, when it fits, and how to think about how much you need.
What life insurance is for
Life insurance replaces your income for the people who depend on it. We sell term life insurance: coverage for a set number of years, chosen to match the years your family needs it.
The right answer depends on what you are protecting and for how long. A policy is a tool, and the tool should fit the job. We would rather sell you the smaller policy that fits than the larger one that does not.
Start with the question, not the product
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Who depends on your income, and for how many more years?
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What would have to be paid off, or kept paid, if that income stopped tomorrow?
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What is already covered by savings, by a spouse's income, or by group coverage at work?
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How many years does that protection need to last?
Term Life Insurance
Term life insurance is the most affordable way to buy family protection for a specific term, generally from 10 to 30 years. It suits younger parents especially well, because it provides financial protection through the years when children are dependents and still in school.
Younger applicants in good health can buy substantial coverage at relatively low premiums.
When term fits
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You have a clear window to cover, such as the years until the youngest child finishes school.
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You have a mortgage or other debt that will be paid off on a known schedule.
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You need the largest death benefit your budget will allow, starting now.
How much coverage does a family actually need?
There is no single right number, but there is a right way to arrive at one, and it takes about fifteen minutes with a pen.
Replace the income, for the right number of years
Start with the income the household would lose, then decide how many years it needs replacing. For parents that is often the years until the youngest child is independent. For a spouse with no separate income it may be far longer.
Clear the debts that would be left behind
Add the mortgage balance, any other loans, and the ordinary bills that keep arriving either way. The goal is that nobody has to sell the house in a bad year simply to stay solvent.
Fund what you have already promised
If you intend to help pay for college or a trade program, include it. This is one of the most common gaps we find when we review an existing policy.
Cover final expenses and a cushion
Include funeral and medical costs, and then add enough of a cushion that your family is not forced to make large financial decisions during the first hard months.
Subtract what already exists
Savings, retirement accounts, a spouse's income and any group life coverage at work all reduce what you need to buy. Count group coverage carefully, because it usually ends when the job does.
Then check the number every few years
The right amount changes when you buy a house, have a child, change jobs, or finish paying the mortgage. We review coverage with clients rather than selling a policy once and disappearing.
A note on age, health and timing
Life insurance is priced on your age and your health at the time you apply, and both of those move in one direction only. The same coverage almost always costs less today than it will next year, and a condition diagnosed between now and then can change what is available to you.
We are insurance agents, not tax or legal advisors. For questions about taxes or estate planning we are happy to work alongside your accountant or attorney.
Coverage for the business itself
Business owners often need life insurance for reasons that have nothing to do with the family budget. A policy can fund a buy sell agreement so a surviving partner can buy out a departing owner's share, or it can cover the loss of a key person the business depends on to operate.
If you own a business, tell us, and we will look at both sides of the picture rather than only the personal one.
Related pages
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