Life insurance 101

If you’re new to life insurance, it can be overwhelming to sift through all the information out there. Learn the basics and find out what you need to make an informed decision.
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What is term life insurance?
It’s a simple, affordable way to provide financial protection for the people who depend on you.

Term life insurance can give you peace of mind knowing your family is covered. A life insurance policy ensures that if you die, the people you love will receive a lump-sum payout, known as a death benefit.

With term life insurance:

  • You choose how long your coverage will last (term length) and the coverage amount your loved ones would receive if you pass away.
  • You pay a monthly or annual price for your policy (your premium) for the duration of your term.
  • If you die during your term, your beneficiary can use the payout for what they need. People typically use it to help cover expenses like a home mortgage, lost income, and children’s college tuition.
Wonder how much coverage you need?
Our coverage calculator helps estimate how much coverage you need to protect your family.
Permanent versus term life insurance
These are the two main types of individual life insurance. There are pros and cons to each, but term life insurance tends to be more simple and affordable.
Permanent (whole or universal) life insurance
  • This type of coverage can last your whole life and often accumulates cash value that may increase the death benefit, or be accessed early by requesting a policy loan or withdrawal.
  • In exchange for the length of coverage and cash value accumulation possibilities, premiums for permanent coverage are typically 10-15X higher than those for term life insurance.
  • If the higher premiums are within budget, permanent life insurance can be a good option for those interested in insurance that will accumulate cash value and will not end after a specific term.
Term life insurance
  • Term policies last for a specific amount of time (your term), and there is no cash value accumulation. You choose the amount of coverage that would be paid out to your beneficiaries if you die before your term ends. If you die after your term ends, no death benefit is paid. It’s that straightforward.
  • Term life insurance premiums tend to cost 10-15X less than permanent life insurance, making it an affordable option for many.
  • Term life insurance can be a good option for those who are interested in cost-effective coverage for a specific term, without the higher expenses associated with a cash value policy.
Employer-sponsored (group) life insurance

Group life insurance typically comes in the form of an employer-sponsored life insurance policy. You might already have some coverage provided to you as an employee benefit. However, this type of policy might only provide a fraction of the coverage you need. For this reason, many people buy an individual term life insurance policy to supplement the coverage they receive through work.

Typical employer life insurance coverage is $25K vs. 10X your salary recommendation.
How do you get term life insurance?
The process of buying a term life insurance policy can vary based on the insurance company you choose, but it generally involves the following steps:
Number One
Submit an application
Apply for the coverage amount and term length of your choosing. Applications ask you for information related to your lifestyle, medical history, and financial history.
Number two
Underwriters review
During this phase, underwriters review your application and determine whether or not they can offer you coverage, and how much it will cost.
Number three
Activate your policy
If you’re approved and accept your policy, your coverage becomes active when your first premium payment is made.
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The traditional paper process can take weeks, even months. Ethos speeds up this process, saving you time and money.
How much does term life insurance cost?
It’s different for everyone and varies based on your unique situation. The biggest factors that can affect your premium include:
Your coverage amount and term length

Less coverage and shorter term lengths tend to cost less.

Your age

Younger people typically have lower rates.

Your health status

Healthier people typically have lower rates.

Your tobacco use

Non-smokers typically have lower rates.

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Your final rate can vary based on the coverage details you choose. Apply online (with no obligations) to get your real rate.
The estimated monthly rate for this policy is:
Coverage amount
Term length
10 years
Please note that all prices quoted are subject to change, including due to underwriting.
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