guide to individual life insurance

Your Guide to Individual Life Insurance [INFOGRAPHIC]

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You can’t cheat life, but you CAN use our individual life insurance cheat sheet!

Life insurance is a lump sum of money given to your family in the event that you pass away prematurely.

That money is used to replace your family’s lost income and help cover their cost of living and other miscellaneous financial burdens – offering tremendous relief in a time of mourning and need.

However, 40% of Americans & 1/3 of U.S. households have NO LIFE INSURANCE.

It may seem morbid to plan for your potential passing, but this preparation could be your family’s saving grace. Use this cheat sheet as a launching point to identify the life insurance plan that’s right for you and your family.

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Determine Why You Need It

It’s important to purchase enough life insurance to cover the costs of all your responsibilities. Consider your role at home.

The Breadwinner

  • Your life insurance should replace your salary and any major anticipated costs.
    • Kids à College Tuition
    • Non-Working Spouse à Career Training/Education
    • Elderly Parents à Nursing Care
    • House à Pay Off Mortgage
    • Other à Pay Off All Loans/Debt

The Caregiver

  • If you take care of an elderly parent, a sick spouse, or a child with a disability then those responsibilities would need to be taken over in the event of your death. Consider all the costs associated with that transition.
    • Ongoing Medical Attention
    • Medications
    • Specialized At-Home Care

The Stay-At-Home Parent

  • Think of all your responsibilities at home that would still need attention.
    • Child Care
    • Housekeeping
    • Landscaping
    • Financial Management
    • Cooking
    • Grocery Shopping

Decide How Much to Purchase

This will vary depending on your age, responsibilities, and income. Follow these steps to identify your ideal premium.

  • Step 1: Place a dollar amount next to each of your responsibilities above (do some research if needed).
  • Step 2: Sum it up and get your total.
  • Step 3: Consider inflation (meaning overestimate your total).
  • Step 4: Decide when you want to reach your total (how many years).
  • Step 5: Calculate the amount of life insurance you will have to purchase to reach that goal (broken down by month).

Understand Your Options

Take a look at 4 of the most common types of individual life insurance to determine the one that’s the best option for you and your family.


  • Typically offers the most coverage for the least amount of money.
  • Purchase a policy at your desired monthly premium.
  • That policy will cover you for a specific (agreed upon) period of time.

Universal Life

  • You are permanently covered.
  • Purchase a policy at a higher premium amount.
  • The excess premium money is invested to offer you a market rate of return.
  • Rates can fluctuate.
  • Beneficiaries can receive the face value or the face value plus cash value amount of the investment account.

Term Universal Life

  • A hybrid between Term and Universal Life.
  • Purchase a policy at your desired monthly premium.
  • That policy will cover you for a specific period of time.
  • You can extend the time (term) at any time.
  • Choose from 10 options that tailor the policy to your unique financial state.

Whole Life

  • You are permanently covered.
  • Purchase a more expensive policy that pays a stated, fixed amount on your death.
  • A portion of your premium is invested to build cash value.
  • The extra cash can cover your premium payments down the road.

Individual life insurance through private insurance brokers can be a great way to supplement group life insurance offered through your employer, or cover all of your life insurance needs if you are not working or are self-employed.

AdminYour Guide to Individual Life Insurance [INFOGRAPHIC]