If something happens to you during your prime earning years, your loved ones don’t just lose you—they also lose the financial future you’ve been building. If you have a partner, children, or elderly parents who depend on you for support (financial or otherwise), then term life insurance can be a great way to secure their financial future by providing them with a safety net should the unexpected happen.

Personal finance experts recommend that you have savings and/or coverage that is at least ten times your annual salary. If you have already built up enough savings to provide that safety net on your own, then you may not need term life insurance.

If not, getting term life insurance can ensure that your family’s future is safe, no matter what.

With Ethos, you can apply for life insurance in just minutes. Upon completing the application, some applicants are approved instantly for coverage! Otherwise, our underwriting process usually only takes about 7-10 business days to complete.

We recommend applying for coverage that is 10-12 times your annual income.

Even if you have employer-sponsored life insurance coverage, you may want to consider additional coverage for your family. Employer-sponsored policies typically offer coverage that is one to two times your salary while you are employed full time by the company. This coverage generally doesn’t cover you once you leave the company. It's important to have a policy that you own yourself so you have full control.

In most cases, the death benefit is not taxed. That said, if you are doing something less common like distributing the death benefit in installments while investing it, or including the benefit as part of an estate, there may be tax penalties for the beneficiary. Make sure to check with an accountant or financial advisor if you think this may apply to you.

Typically, life insurance payouts are used to cover expenses like home mortgages, burial expenses, college tuition, existing debt, medical bills, living expenses, cosigned debt, or any other expenses your loved ones may have.

That said, your beneficiaries ultimately decide how to use the cash payout.

A death benefit is the amount of money that an insurer pays to your beneficiary if you pass away during the policy term. Typically, it is paid in a single lump sum and is untaxed.

A life insurance policy is a contract between you and an insurance company. In that contract, you agree to make payments (premiums) to the insurance company for a specified period of time (sometimes for the duration of your life), and the insurance company agrees to provide a lump-sum cash payout ("death benefit") in the event that you die within the duration of the policy. The contract is legally binding and government regulated.

A premium is the price you pay to the life insurance company to secure your coverage amount. It can be paid monthly, twice a year, or annually depending on your preference. If you continue to make premium payments, the insurance company must meet their obligation to provide your beneficiaries with the stated benefit in the event of your passing.

A beneficiary is a person (or persons) who will receive the proceeds of the life insurance policy when the insured person dies. You can name one person or multiple people as beneficiaries when you select a policy, but you will usually only have one primary beneficiary.

You are not locked into a life insurance policy, and can typically terminate it by ceasing to pay the premiums.

Term life insurance is the most simple and affordable option. It provides coverage for a set amount for a set period of time or “term”, typically 10–30 years, and is designed to protect your dependents. If you pass away during the term period, your beneficiaries receive a cash payment (the "death benefit") to cover any expenses.

It's recommended to choose a term length that covers you while you're most vulnerable. You can consider choosing a term length that covers you for the length of your mortgage or until your children are independent.

There are two types of life insurance: term life insurance, and permanent life insurance.

Term life insurance is the most simple and affordable option. It provides coverage for a set period of time or “term”, typically 10–30 years, and is designed to protect your dependents. If you pass away during the term period, your beneficiaries receive a cash payment (the "death benefit") to cover any expenses.

Permanent life insurance is complex and costly (often ten to fifteen times more expensive than term life insurance). It provides coverage in a set amount for your entire life and is sometimes used as an investment vehicle. Some insurers invest your premium payments and the interest earned on those investments goes back into your policy as accrued cash value. Please note: when choosing this type of policy, you should be prepared to assume meaningful levels of risk.

Some permanent life insurance policies let you borrow against the accrued cash value (surrender the policy for a cash payment). But if you don’t repay the amount borrowed with interest before you pass away, the amount paid to your beneficiaries will be reduced.

Because our mission is to protect vulnerable families, Ethos offers term life insurance and recommends it particularly if:

You need coverage to replace your income over a fixed period of time (like when you’re raising children or paying off a mortgage)

You want the most affordable coverage

You want a more streamlined and straightforward process

Life insurance increases as you age, so it's best to purchase at a young age. Life insurance is important if you have just purchased a home and need to cover the mortgage, if you've recently had a baby or have plans to in the future, or if you would like to provide income replacement to your family in the event of an untimely death.