Life
When do you need life insurance—and how much may be enough?
Reviewed by Maria Navarrete-Collins
The short answer
Consider life insurance when another person depends on your income, care or financial support. A common starting point is enough coverage to handle final expenses, pay off shared debt and replace several years of income.
Who may need this coverage
- Parents and guardians
- Couples with a mortgage or shared debt
- Business owners and business partners
- Anyone providing care that would have to be paid for otherwise
Why it matters
Life insurance turns an unpredictable event into a planned one. It gives the people you support time to make decisions instead of making them under financial pressure.
Situations in which it may be needed
- Marriage, a new child or adoption
- Buying a home or co-signing a loan
- Starting or buying into a business
- Leaving a job that provided group coverage
Risks of being uninsured or underinsured
- Surviving family covering final expenses out of savings
- A mortgage or loan that still has to be paid
- Reduced household income with the same monthly bills
- Relying only on group coverage that ends with the job
What this coverage commonly helps protect
- Final expenses and outstanding debt
- Ongoing household income
- Childcare, education and caregiving costs
- Business continuity through buy-sell planning
What it may not cover
- Losses excluded during a policy's contestability period
- Coverage that lapses because premiums were not paid
- Medical or disability expenses while you are living
- Amounts above the policy's stated death benefit
Questions to ask your agent
- How much coverage fits my budget today?
- Should I use term, permanent coverage or both?
- How does my employer coverage fit into the plan?
- Are my beneficiaries current?
A practical checklist
- Add up debt, final expenses and years of income to replace
- Subtract savings and existing coverage
- Decide on a coverage term that matches your obligations
- Confirm beneficiaries and contact information
- Review again after any major life change
Related coverage
Life Insurance
Help replace income, handle final expenses and protect your family's options.
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Coverage descriptions are general educational summaries. Actual coverage, limits, conditions and exclusions depend on the issued policy and may vary by state. Contact a licensed insurance professional to review your specific needs.