Start with the people who depend on you

Life insurance is a contract that can pay a death benefit when the insured person dies while coverage is in force, subject to its terms. The insured is the person whose life is covered. The policy owner controls the contract, and a beneficiary is named to receive the benefit. One person can fill more than one role, but these roles are not interchangeable. Premiums are payments required to maintain the policy.

To understand a household’s needs, list ongoing expenses, debts, dependent support, and services that would have to be replaced. Unpaid caregiving can have substantial replacement costs. Consider the duration of each responsibility, along with savings and existing coverage available for it. There is no single coverage amount that fits everyone. Employer coverage may help, but check what happens if employment ends, including whether continuation or conversion is available and what it would cost.

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