What is Life Insurance & How Does it Work?

In short, a life insurance policy is a contract between you and an insurer. In that contract, you agree to pay premium payments to the insurer for a specified term. In exchange, the life insurance company agrees to provide a cash payout (or death benefit) if you were to pass away within that period. The death benefit is paid out to the person (or persons) that you designated, often called beneficiaries.
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Want to learn more about term coverage?
Ethos only offers term life insurance policies that are fast, flexible, and affordable.
Do I need life insurance?

If something happens to you, your loved ones don't just lose you—they also lose the financial future you've been building. Term life insurance can be a great way to secure their future, no matter what. Read about who needs life insurance coverage to learn more.

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People who should consider life insurance
Most Americans need some type of life insurance. Here are a few examples of people who benefit from having it the most.


If you've recently purchased a home, life insurance is a great option to cover the expense of a mortgage payment. This will also help support any co-signers on your home in the event that you unexpectedly pass away.


If you are the primary breadwinner in your household, life insurance can help your loved ones pay for living expenses, tuition, debts, and other expenses your income supported.

Stay-At-Home Parents

Your role as a stay-at-home parent is just as important as if you were working outside of the home. If you're caring for your children as opposed to paying for childcare or managing a household rather than paying for services, odds are you're saving a huge amount of money. Life insurance will help fill these gaps for your family.


As a parent, you're responsible for protecting your kids, and this includes providing financial stability for them. Having adequate life insurance in place can help make their lives easier and filled with less hardship. If you're a single parent, it's important to dot all your I's and cross your T's when it comes to providing financial security for your family since there is no other income to fall back on. How would your kids' lives change if they didn't have your income and support? It's a tough topic to think about, but it's wise to prepare with insurance to ensure that they can continue to live comfortable lives.

Individuals With High Debt

Even if you're single and rent, or live with your parents, you may want to consider getting a small life insurance policy if you have a lot of debt. Some student loans won't be discharged due to bankruptcy or death. This coverage can help alleviate this financial burden on your loved ones.

When should I get life insurance?
In order to get the best rates possible, you should try to get life insurance sooner rather than later. Life insurance rates increase each year as you get older, so it's best to lock down a lower rate today for more coverage.
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What to get covered
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Think about all of your outstanding debt that would be put on your family if something were to happen to you when getting life insurance.
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Examine your expenses and determine how many years you would want to have your income covered.
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Consider current mortgage balances that would need to be covered if something were to happen to you.
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Planning on sending your kids to college? Consider how much you anticipate spending on tuition for them when choosing your coverage.
How much life insurance coverage do I need?

Buying life insurance can seem overwhelming, especially when it comes to figuring out how much coverage you need to protect your loved ones. A rule of thumb is to get enough life insurance coverage to cover 10x your income. That being said, some coverage is always better than none—you can tailor the length and coverage of your life insurance policy to fit your lifestyle, budget, and needs.

You can also use our coverage calculator to get a recommended plan for your specific needs. Read more about how much life insurance coverage you should have.

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How to apply with Ethos
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Answer a few simple questions and get a coverage estimate tailored to you in minutes.
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Apply online
We’ll guide you through the easy application process and verify your identity, sign electronically, and submit your application.
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Get approved
We’ll send your application to our underwriting partner to finalize getting you covered. Pat yourself on the back for protecting your loved ones.
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