$500k for $30/mo
What is life insurance?
Life insurance is a contract where you pay premiums and the insurer pays your beneficiaries a lump sum if you die. It replaces lost income for people who depend on you. Term life insurance (coverage for 10–30 years) is the simplest and cheapest option — a healthy 35-year-old can get $500,000 of coverage for $25–40/month. You need life insurance if you have dependents (spouse, children, parents) who would struggle financially without your income.
Level
Try calculatorKey takeaways
04 · ideas- Life insurance replaces your income if you die and leave dependents
- Term life (10–30 years) is cheapest; whole life is expensive and complex
- A 35-year-old can get $500k of 20-year term for ~$25–40/month
- You need life insurance if others depend on your income
Illustrative chart
$200k · 7.5% · 30yr
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Life insurance is a contract: you pay monthly premiums, and if you die, the insurance company pays a lump sum (the death benefit) to your chosen beneficiaries — your spouse, children, or others.
Who needs life insurance:- ✅ Parents with children who depend on your income
- ✅ Spouses where one or both incomes are needed
- ✅ Anyone whose death would leave others with debt or financial hardship
- ❌ Single person with no dependents (usually don't need it)
- ❌ Children (they don't have income to replace)
The two main types:
Term life insurance:- Covers you for a fixed period (10, 20, or 30 years)
- Pays only if you die during the term
- Much cheaper — $25–$40/month for a healthy 35-year-old to get $500,000
- The right choice for most people
- Covers you for life, as long as you pay premiums
- Has a cash value component that grows slowly
- Very expensive — 5–15× more than term
- Often oversold; rarely the best financial choice
Simple rule: Buy term, invest the difference.