WHY?:
Suppose that you had a machine in the living room of your home, that every month “spit out” about  $ 4,000.  Would you consider insuring that machine?  Sure you would.  You wouldn’t want someone to come and steal that machine from you as you would lose what that machine produces, $ 48,000 each year.  Well a “bread winner” is such a “money machine”.  A  family will need to replace this income and life insurance is the solution. 

RISK                                                      ODDS                               COST
 
Fire                                                      1 in 1200                  $ 200,000
Auto w/Liability                            1 in   240                   $ 355,000
Major Medical                                 1 in     15                    $   50,000
Long Term Disability                   1 in       9                     $ 160,000
Long Term Care                              1 in       2                    $ 100,000+
Death before age 65               1 in      5.5                 $ 500,000+ 

 What?: Life insurance is the solution, but the questions that stumps most is what amount and what type of  life insurance. 

The amount is called the face value of the life policy. Face values can range from 10K on up. The face amount for working adults with dependent spouses and children should look at replacing their annual income.  Most people’s incomes are generated to age 65 when they hit retirement age. For this reason we need to first focus on this time period of earning years, and not for the whole life. 

There are different methods for coming up with a face amount to replace the income. 

1) Live off the interest of the face amount and not touch the principal amount to replace the income. (Most conservative)
2) Do 5-8 times income face amount to provide an adjustment period for spouse and children. (More Flexible)
3) Just buying what is affordable as any life insurance is much better than nothing in the event of a tragedy.
You might already have some life insurance and you can subtract that out and the resulting number is your life insurance need or gap. 

Types of policies: 

1) Term policies that expire 10,20, or 30 years out from issuing. (good to cover just your earning years to age 65)
2) Annual renewal terms, these policies are typical of work group policies and can change premium year to year or lapse if job is lost. (easy but not permanent)
3) Whole life policy, never expires, and are the most costly. Can be used in some circumstances for tax deferment. 

WHO?: Any person that has dependents they want to protect, such as children, spouses, elderly parents in your care, etc. should have life insurance. 

WHEN?: Life policies are easier to qualify and a better rates when at a younger age (65 and younger). but can be obtained at almost any age for a price. 

 HOW?: To apply for a life policy personally versus being part of a group you must take a paramedical exam. The exam is paid for by the insurance company and includes health history questions, urine, and blood sample. It takes place at your home or office at your convenience. From there the insurance company determines a tier for pricing. Typically premier, preferred, or standard. 

How much?, a lot depends on age, term, and face amount, but for example policies can be had at 13 dollars a month for 150K 10-year term for a 30 year old.