The first step in starting a life insurance policy is choosing a benefit. The goal should be to choose a benefit that allows your loved ones to continue their current lifestyle. Some choose a benefit that equals their debt (including mortgage), which would leave their beneficiary debt-free. Many experts recommend a benefit is that is 7 to 10 times annual income. We recommend applying for the largest benefit that you may want since after you start the application process you can rarely increase the term or benefit. Once you complete the application process, underwriting will provide a final rating, and at that time you can decrease the benefit or term to keep the life insurance costs within your budget.

With term life insurance, premiums are guaranteed to remain unchanged for the term you select, whether that be 10, 20, or 30 years. Once the term expires, premiums will increase annually. At that time, you will have the option to apply for a new policy. There is more security in longer terms, as there are no guarantees that you will be able to qualify for an affordable life policy in the future, especially since health conditions become more common with age. Term life insurance policies tend to be more affordable than permanent.

Permanent life insurance will remain in force as long as the premium is paid. There are many different life plans available. Most have an investment component. A portion of the premium pays the cost of the life benefit, and a portion goes into an accumulation account that, if funded properly, grows over time. The portion of your premium directed toward the benefit increases with age. You can take withdrawals or loans from the accumulation account and can skip payments if the accumulation account can support the cost of the benefit.