Life Insurance basics

Life insurance replaces your income and covers obligations if you die, so the people who depend on you are protected. The first decision is term versus permanent.

Term life covers you for a set period — often 10, 20, or 30 years — and pays a death benefit if you die during the term. It is the simplest and most affordable for most families.

Permanent life (whole or universal) lasts your whole life and builds cash value, at a much higher cost. It fits specific estate or business needs more than typical income replacement.

How much you need usually ties to income, debts, and future costs like a mortgage or children's education. And whoever you name as beneficiary receives the money directly — keep those designations up to date after big life events.