As a general rule, if you're the primary breadwinner of the house and there are people who depend on you for financial support, like a spouse, children, or aging parents, then you’re a good candidate for life insurance. Additionally, if you have debt that another person will have to assume, like a mortgage or student loan debts, it's a good opportunity to look into life insurance.
Learn more about if you need life insurance.
Life insurance can be used to cover a variety of common expenses, like:
- Co-signed debt including student loans
- College expenses for the kids
- Living expenses for your family
- Stay-at-home labor expenses (cooking, cleaning, etc.)
- Burial expenses
- Loans from family members
- Estate taxes that your heirs must pay for other assets
Learn more about how life insurance works.
The beneficiary is the person or entity named as the recipient of your policy’s death benefit. It can be a family member, a person unrelated to you, or even a business or other organization. You choose the beneficiary on your own—you don’t need permission from the insurer or the beneficiary. You can also choose more than one beneficiary, and designate how you want the death benefit to be split among them.
Your insurer will automatically disburse the death benefit if you die, but it’s still a good idea to tell any beneficiary about the policy so he or she will be prepared to take action should a problem arise. For this same reason it’s also a good idea to provide the beneficiary with access to the contract.
Learn more about life insurance beneficiaries.
Technically a beneficiary does not have to do anything to receive your policy’s death benefit, but it’s a good idea to make sure he or she is aware that the policy exists in case there are any delays or complications on the insurer’s side.
The insurer will require proof of death and a copy of the contract in order to disburse the benefit.
Learn more about how life insurance beneficiaries claim the death benefit.
Many employers offer life insurance as part of a benefits package. Usually, the amount is a multiple of your salary, up to a limit (usually one or two times your salary). Whether this is enough protection for your needs depends on your financial situation.
Life insurance is more expensive for those who are older or in poor health, so employer-offered life insurance can be a great way to obtain coverage if you can’t otherwise afford it.
Learn more about employer-sponsored life insurance.
The premiums you pay for your life insurance policy are not tax deductible.
The difference between and agent and a broker is that an agent usually sells insurance for a single insurer, while a broker sells insurance for any number of insurers.
In some cases an agent may actually be employed by the insurance company, although there are also agents who are self-employed.
If you’re looking for details about a specific insurer’s products, an agent may be the best person to talk to. However, if you’re trying to comparison shop across multiple insurers, you may want to contact a broker.
Agents and brokers always provide their services for free, and earn commissions off of the policies they sell.
Learn more about life insurance agents and brokers.