Interested in life insurance but don't know where to start?
Find out all you need to know.
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If something happens to you, your loved ones don’t just lose you—they also lose your income, on top of everything else you provide. If you provide financial or caregiving support to someone, it’s essential to make sure they would be taken care of if they lost you.
Even if you have employer-sponsored life insurance, you may want to consider additional coverage. Employer-sponsored policies typically offer coverage that is about 1-2X your annual salary. However, financial experts recommend having coverage that is about 10X your salary. That can result in a large gap in protection if you’re solely relying on your policy through work.
A life insurance policy can help your family maintain the lifestyle they've grown to love and provide long-lasting financial security.
Permanent insurance is more complex than term, and it offers different benefits. Whole life is the most well-known and simplest form of permanent life insurance. While term life insurance lasts for a specified term, whole life insurance lasts for the rest of your life. A payout is guaranteed at the time of death for your policy’s beneficiaries, and some of the money paid into the policy (your premium) is set aside to build “cash value” which can increase the death benefit or be accessed on a tax-free basis with a policy loan. Advocates for whole life policies say this is a more conservative, long-term strategy over buying term insurance. These features are why whole life policies can cost up to 20X more than term policies. (Financial Mentor)
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 during that term. If you pass away during the term period, your beneficiaries receive a cash payment referred to as the “death benefit” to cover expenses or income loss related to your passing.
Ethos offers term life insurance and recommends it particularly if:
- You need to replace your income over a specified period of time (for example raising children or paying off a mortgage).
- You want the most affordable coverage.
- You want a more streamlined and straightforward process.
- Choose between 10, 15, 20, and 30-year terms.
- Get anywhere from $100,000 to $1.5 million in protection.
- Any U.S. citizen age 20 – 65 are welcome to apply.
- All policies issued by Ethos include an accelerated death benefit rider.
There are a few ways to think about your coverage amount. A simple way to calculate this is by multiplying your annual salary by 10. Or, you can use the tools below to get a more detailed estimate. Alternatively, you can use the DIME method to add up what you need.
Total coverage = Debt + Income + Mortgage + Education costs
Determining the right term length can depend on several factors. Consider a term that would cover your family for the number of years they would depend on you, financially or otherwise. You may want a term that lasts until:
- You retire
- Your children are grown and are no longer dependents
- Your mortgage is paid off
- You reach your savings goals
The cost of your policy can vary based on several factors, including the term length and amount of coverage, in addition to your gender, age, health, and lifestyle.
With Ethos, you can customize your policy by choosing 10-30 year term lengths and $100,000- $1,000,000 in coverage. Your monthly rates stay the same throughout the entire duration of your term.
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