Life Insurance
The differences that actually matter, without the sales script.
Life insurance answers one question: if your income stopped tomorrow, what would happen to the people who depend on it? Everything else — the product types, the riders, the illustrations — is detail underneath that question.
The two broad categories
Term
Covers a set period — often 10, 20, or 30 years — and pays a benefit if you die during it. Generally the least expensive way to buy a given amount of coverage. When the term ends, coverage ends unless it is renewed or converted.
Permanent
Designed to last for life, and typically builds cash value over time. Costs more for the same death benefit. Makes sense for specific situations — lifelong dependents, estate considerations, certain business arrangements.
How much is enough?
There is no universal formula, but the honest version of the question is: what would actually need to be paid for? Remaining mortgage, years of income replacement, children's education, final expenses, and any debts that would not disappear. Add those up, subtract what is already covered by savings or existing policies, and you have a starting figure worth discussing.
Things people find out too late
- Employer coverage usually ends when the job does. If it is your only policy, a job change can leave a gap at exactly the wrong moment.
- Health changes affect eligibility and price. Coverage is generally easiest to obtain when you do not yet feel you need it.
- Beneficiary designations override a will. An outdated designation on an old policy can send money somewhere you no longer intend.
- Term policies often include a conversion option. That option typically has a deadline, and many people are unaware they have it at all.