Common methods include: 10x annual income rule (quick estimate), DIME method (Debt + Income + Mortgage + Education), or detailed needs analysis.

Example for $75k earner with mortgage: Income replacement ($750k for 10 years) + Mortgage ($250k) + Other debts ($25k) + Kids education ($200k) + Final expenses ($15k) = $1.24M total needs.

Subtract existing assets ($150k) and current insurance ($100k) = $990k additional coverage needed.

Round up to $1M policy for simplicity.

Review every 3-5 years as needs change.

Match term length to your longest financial obligation.

Common scenarios: 20-year term for new parents (covers until kids are independent), 30-year term for new homeowners (matches mortgage), 15-year term for those 10-15 years from retirement, 10-year term for temporary needs or budget constraints.

Laddering strategy: Buy multiple policies with different terms (e.g., $500k 30-year + $500k 20-year + $250k 10-year) to reduce costs as coverage needs decrease.

Lock in rates while young and healthy—premiums increase 8-10% per year of age.

Rates vary by age, health, term length, and coverage amount.

Sample monthly rates for $500k 20-year term (non-smoker, excellent health): Age 30: $25-35/month, Age 40: $40-60/month, Age 50: $110-150/month.

Factors affecting rates: Health class (Preferred Plus saves 20-40%), Tobacco use (2-4x higher), Term length (30-year costs 40-60% more than 20-year), Gender (women pay 20-30% less), Dangerous hobbies/occupations (surcharges apply).

Most people qualify for Standard or Preferred rates.

Term life provides pure death benefit protection for specific period (10-30 years) at lowest cost—ideal for temporary needs like mortgage protection or income replacement.

Whole life combines permanent death benefit with cash value accumulation at 10-20x higher premiums.

Example: $1M coverage for 40-year-old: Term life 20-year: $80/month ($19,200 total over 20 years), Whole life: $1,000/month ($240,000 over 20 years, continues for life).

Term is better for 95% of people—invest the difference ($920/month) for greater wealth building.

Consider whole life only for estate planning or special needs trusts.

Most term policies include conversion riders allowing change to permanent insurance without medical exam, typically until age 65-70 or within first 10-20 years.

Useful if you develop health conditions preventing new coverage or discover permanent insurance needs.

Conversion uses your current age for pricing (not original age), so premiums jump significantly.

Example: Converting $500k term at age 55 to whole life might cost $800-1,200/month.

Strategy: Buy term with strong conversion options, convert only small portion if needed, maintain term coverage for bulk of protection needs.

Primary factors: Age (rates double every 10 years approximately), Health history (diabetes, heart disease, cancer affect class), Family history (premature deaths before 60), Height/weight ratio (BMI over 30 increases rates), Tobacco/nicotine use (includes vaping, marijuana), Driving record (DUIs, multiple violations), Credit score (some states), Occupation and hobbies (pilots, scuba divers pay more).

Best rates (Preferred Plus) require: No tobacco 5+ years, Excellent health metrics, No family history issues, Safe occupation/hobbies.

Even with health issues, coverage is usually available at Standard or Substandard rates.