Life Insurance

Dear Penny,

What are some of the key aspects of a life insurance policy? I’ve been in touch with a few companies and the monthly rate for the policy ($0.5M 30yrs) that I am looking for are still affordable.

How do I choose the best policy? I know the bank ratings are key but I am not sure what I should focus on and what are the right questions to ask.

Your guidance is appreciated.


Hi @christina.desgrottes! Glad you’ve been able to get quotes at a reasonable rate. So many people wait too long and find that the premium is affordable.

Ideally, you’d choose one with a level term instead of one with an annual renewable term. With a level term, your premiums will stay the same throughout the policy. It will be more expensive at the beginning, but it will probably save you money over that 30 year term. Your life is way less expensive to insure today than it is 10 or 20 years from now, so your premium could skyrocket with an annual renewable term.

I think the big thing is making sure you have enough coverage and for the appropriate term. Obviously, you don’t have an unlimited budget to spend on life insurance, so once you’ve determined how much you can afford, it’s important to carefully assess what your needs are.

A rule of thumb you often hear is that you should have coverage for at least 10 to 15 times your annual salary. Sometimes it’s worth it to buy more coverage for a shorter term (say, 20 years) depending on the ages and needs of the loved ones you’re looking to protect — or at least get a quote for comparison.


If my employer provides a $75,000 group life benefit, and my mother has a 20-year term life policy for $250,000 on me, are these sufficient? Thanks.