Getting life insurance is an important part of a financial plan—but it’s not always clear how much coverage is enough or what type of policy makes sense. Deciding what to buy, how much coverage you may need, and when to apply can all affect how well a policy supports your financial plan. Here’s a guide on how you can get life insurance, and how to decide what life insurance coverage is right for your needs.
How to get life insurance in 4 simple steps
Understanding how to get life insurance starts with a few key considerations. Your goals dictate the type of coverage that fits your needs and how much protection may be enough. Once you know what you’re looking for, the application process tends to fall into place.
Step 1: Start with your goal, then choose a type of insurance
Before choosing a policy, it helps to think about what you want life insurance to potentially cover. For example, you may want to replace income, cover a mortgage, pay for a child’s education, or leave money to family or a charity. Clarifying your goal can help guide the type and amount of coverage to consider.
Term life insurance provides coverage for a set period, such as 10, 20, or 30 years. If you pass away during that time, your beneficiaries receive the payout. If the term ends while you’re still living, you may be able to renew the policy, let it lapse, convert it to permanent life insurance, or buy a new policy. Many people choose term insurance because it is typically more affordable and aligns with temporary financial responsibilities, like raising children or paying off a mortgage. Many term policies also offer conversion features. This can be beneficial because a term policy can protect your insurability. All or part of the term coverage can be converted to permanent coverage along the way without additional underwriting.
Permanent life insurance is generally designed to provide lifelong coverage as long as required premiums are paid or funding requirements are met. It includes options like whole life and universal life. In addition to a death benefit, these policies build cash value over time that can be accessed under certain conditions. This added feature can support long-term planning but often comes with higher premiums.
The right choice depends on your goals, timeline, and budget. For many people, term insurance offers a practical starting point, especially when they are younger and may qualify for lower rates. A convertible term policy may also provide flexibility to move into permanent coverage later without additional underwriting. Permanent insurance may play a role in more complex financial strategies.
Step 2: Determine how much life insurance coverage you need
Once you’ve chosen a type of policy, the next step in purchasing life insurance is deciding how much coverage you need. There are generally 2 ways to estimate your coverage needs. A bottom-up approach starts with a detailed look at your debts, goals, income, and existing resources. A top-down approach starts with your income and estimates how many years your family may need support.
To use the bottom-up approach, start by reviewing your financial obligations. This might include:
- Mortgage or rent
- Outstanding debts
- Child care or education costs
- Everyday living expenses
Next, consider income replacement. If your income supports your household, think about how many years your family may depend on that income.
You may also want to include:
- Final expenses, such as funeral costs
- Future goals, like college funding
- Estate planning and taxes
- Any legacy intentions, such as leaving money to family or charity
After estimating these needs, subtract existing resources, including savings, investments, and any current life insurance coverage, such as employer-provided life insurance. Employer-provided coverage can be a helpful starting point, but the amount may be limited and the policy may not be portable if you leave your job. The remaining gap can help estimate how much additional life insurance coverage you may need. Read Viewpoints: Are you underinsured?
The second way to estimate your coverage need is a top-down approach, which focuses mainly on income replacement. For example, you might start by multiplying your income by the number of years your family may need support, then adjust for existing insurance, savings, and other needs. For a quick estimate of how much coverage you may need, try Fidelity’s term life insurance coverage calculator.
Step 3: Compare life insurance quotes
When considering how to get life insurance, comparing quotes can be an important step. Life insurance quotes provide estimates of what coverage may cost. Costs can vary significantly depending on the insurer, your health profile, your age, and the type of policy you choose.
When reviewing quotes:
- Make sure you understand the type of insurance you’re considering and comparing
- Evaluate the premium (monthly or annual cost)
- Confirm the coverage amount and term length
- Review any policy features or optional riders
- Check the insurer’s reputation and financial strength
Getting multiple quotes can help you understand what’s typical and possibly spot meaningful differences. While price is important, it’s also worth considering the overall value of the coverage and how well it fits your goals.
You can use Fidelity’s term life insurance quote tool to get an estimate in minutes based on a few basic details. If you decide to move forward, the application can be completed from there: Fidelity's term life insurance quote tool
Step 4: How to apply for life insurance
After selecting a policy, the application process is usually straightforward. Knowing what to expect—from the application to underwriting—can help you navigate the process and avoid surprises.
- You’ll start by completing an application with basic information, including your age, occupation, lifestyle habits, and medical history. Providing accurate information helps ensure a smoother underwriting process.
- Depending on the insurer, policy type, coverage amount, and your application details, you may be asked to complete a medical exam. This may include measurements such as height, weight, and blood pressure, and sometimes bloodwork. In some cases, an insurer may be able to review your application without an exam, which may help speed up the process.
- During underwriting, the insurer reviews your application to determine your eligibility for coverage. If approved, the insurer assigns a risk class based on the information reviewed, which helps determine your final premium. Once approved, you’ll receive your policy details and finalized price to review before signing. Your final premium may differ from the initial quote.
- After acceptance and your first premium payment, your coverage becomes active.
Common mistakes to avoid when getting life insurance
Understanding common pitfalls can help you avoid gaps in coverage, manage costs, and choose a policy that fits your needs over time.
- Waiting too long. Life insurance is generally more affordable when you’re younger and in good health. Delaying can increase costs or limit your options.
- Underestimating your coverage needs. Choosing a lower amount to reduce premiums may leave gaps later. Taking time to estimate needs can help ensure more meaningful protection.
- Not updating your policy. Major life events—like marriage, having children, or buying a home—can change your coverage needs. Periodic reviews can help keep your policy aligned.
- Not updating your beneficiaries. Beneficiary designations supersede any instructions in a will or trust. Keeping your beneficiaries updated can ensure that any proceeds go to the right people.
- Overlooking policy details. Features like exclusions, riders, or cash value access can affect how a policy works. Understanding these details upfront can prevent surprises.
- Focusing only on price. Lower premiums can be appealing, but the goal is balanced coverage that supports your financial priorities over time.
The bottom line on how to get life insurance
Getting life insurance doesn’t have to be difficult. By understanding your needs, exploring available options, and considering your budget, you can find coverage that fits your situation and supports your financial plan.
You may also want to consider features that add flexibility, such as the option to convert term coverage to permanent insurance or add riders that can adjust how your policy works over time. Some people choose to ladder multiple term policies to match changing financial responsibilities. It can also be helpful to work with a financial professional to understand how life insurance can support your long-term plan. Revisiting your coverage periodically can help ensure it continues to reflect your needs as they evolve.