If someone depends on your income, term life is a cheap way to make sure one bad day does not wreck their decade. If no one depends on your income, you probably do not need it at all. Whole life is almost always the wrong answer.
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Buy a plain 20 or 30-year term policy for roughly 10-12x your annual income, plus any outstanding mortgage, minus savings your family could live on. Avoid whole life, variable life, and universal life - they are mostly expensive commission products. Shop Policygenius, Haven Life, Bestow, or Ladder. Do the medical exam to save 30%. Revisit coverage every 5 years as your life situation changes.
The only reason to buy life insurance is to replace income or pay off debts someone else could not cover if you died tomorrow. Start from that definition and almost every other question gets easier.
A tiny $10K "final expense" policy for funeral costs is not usually worth the money. Set aside $10K in a high-yield savings account and you have self-insured the same thing with full liquidity.
Whole life is typically 10 to 15 times the premium for the same death benefit [VERIFY]. Sell the difference, invest it, and you come out ahead in nearly every realistic scenario. The "forced savings" argument is a marketing story - a basic Roth IRA or taxable brokerage does the same job with vastly lower fees.
Healthy non-smoker, 20-year term, $500,000 death benefit. Pure insurance. No cash value, no "investment," no fees beyond the premium.
Same death benefit. Bundled with a low-return "cash value" account, heavy commissions for years 1-10, and enough complexity to obscure what you actually paid.
The $375 per month difference between term and whole, invested in a boring index fund at 7% over 30 years, becomes roughly $450,000 [VERIFY at 7% real, $375/mo, 30 years]. That is the opportunity cost of "permanent" life insurance for most buyers.
Whole life has narrow uses - high-net-worth estate planning, funding a buy-sell agreement, certain tax-estate edge cases. If one of those applies, talk to a fee-only advisor, not the person who sold you on it. If none apply, buy term.
The common rule is 10 to 12 times your annual income. Add any remaining mortgage balance, subtract existing savings and life insurance your survivors could actually live on. The goal is to replace your economic contribution long enough for the household to stabilize.
$80,000 annual income, $200,000 mortgage, $50,000 savings.
Round up, not down. Underinsuring by $100K to save $5 a month is a bad trade. Round-number policies ($1M, $1.5M) often price better than awkward ones.
You do not need $1M of coverage for the full 30 years. Your need declines as kids grow, the mortgage shrinks, and the portfolio compounds. Laddering stacks a shorter, larger policy on top of a longer, smaller one so your total coverage matches the risk over time.
Example: a $500K 30-year policy plus a $500K 20-year policy gives you $1M of coverage while the kids are young and $500K after they are out of the house, at lower total premium than a single $1M 30-year policy.
Life insurance is a commodity. The same healthy 35-year-old can get quotes that differ by 30% or more across carriers for the identical policy. Always run at least three quotes.
Do the medical exam. No-exam policies are convenient but typically cost 30% more [VERIFY]. A blood draw and a phone interview is worth it once.
Life insurance is income replacement. If Bitcoin is a meaningful and appreciating slice of your net worth, the amount of income your family needs to replace shrinks over time. A $500K stack that grows into a $2M stack is, in insurance terms, doing the job a $2M term policy would otherwise do.
Revisit the coverage ladder every 5 years. If the stack has grown, consider dropping the shorter rung of your ladder early rather than renewing. Do not cancel all life insurance based on a Bitcoin bull run - that is timing the market with your family's downside.
Last updated 2026-04-14. Not financial advice. Do your own research.