Determining Your Coverage Need

If you understand the general types of life insurance, the next step is to think about your own life insurance needs.

Get Updates About Your Local Real Estate Market

Choosing between term and permanent coverage.

Identifying the appropriate type of insurance—term or permanent—is the first consideration in choosing coverage. If your insurance need is for your lifetime, then permanent insurance, such as universal life insurance may be an appropriate solution. If your insurance need is primarily for a specific period of time, such as your working years, then term life insurance may be an appropriate solution. It is important to choose a coverage period that will meet your life insurance needs to ensure that the people important to you are protected.


Choosing coverage amount.

In addition to your coverage period, the coverage amount is another important consideration. The coverage amount is how much will be paid to your beneficiaries. Your coverage amount will depend on the need you are trying to meet, but these are some general factors to consider:

  • Your potential income
  • Your assets
  • Your liabilities (such as debts)
  • Any existing insurance (individually owned or through work)
  • Other costs your family is expected to face

Determining coverage amount and duration by a life event.

Major events in your life can be good opportunities to make your initial life insurance purchase or review your current coverage. Use the table below to help determine your coverage amount and coverage period according to the milestones you have reached or that you will in the near future.