How to buy life insurance: A step-by-step guide

Life insurance exists because it can provide an important solution to a pressing emotional need: People often worry about how their family will carry on if they pass away unexpectedly. A life insurance policy can provide their financial dependents with a significant sum of money — often enough to replace several years' worth of income.

If you want to buy life insurance — or even just learn about it — a good way to start is by getting a quote for coverage. Or, read on for a step-by-step guide that can tell you how to:

• Choose the right type of coverage for your needs

• Estimate how much protection you need

• Find an insurance company you can trust

• Navigate the application process

• Avoid common mistakes

1. Decide if you need life insurance

Your financial and personal circumstances are unique. If you don’t have a family or dependents, or if you already have enough assets to help ensure your loved ones’ financial future, you may not need the financial protection of life insurance. However, you probably should consider coverage if:

• You have family members who would face hardship without your income

• You have debts — or a mortgage — that would fall on others if you died

• You want to make sure your children or spouse have funds for college tuition or retirement

If any of these circumstances apply to you — or you have another reason for getting coverage — here are a few simple next steps to consider.

2. Find out about the two main types of life insurance

There are two main types of life insurance — term life insurance and permanent life insurance:

• Term life insurance covers you for a limited period of time, typically 10 or 20 years, although 15- and 30-year term coverage is also available.* Once the term expires, you are no longer covered, and because there’s no cash value, there’s nothing left. However, compared to permanent life insurance, these policies cost less for a given level of coverage.

• Permanent life insurance (universal or whole life insurance) provides coverage that lasts your entire life, as long as premiums are paid, and includes an asset‑building cash value component.^1,2 These policies tend to cost more because a portion of your premium dollars will grow tax-deferred as cash value and can be used while you're alive.^3,4 Importantly, the entire death benefit amount is immediately payable from the first day you have the policy.

3. Decide what type of policy to get

According to the 2025 Insurance Barometer Study from LIMRA, 51% of Americans say that they have some type of life insurance.⁶ But which type is right for you? If you think you just need to get coverage for a limited period of time — for example, while your children are growing up — then term life insurance can be a good choice. These policies are relatively easy to buy and can be a cost-effective way to get a significant death benefit.

If you need coverage that lasts your entire life — or you’re not sure how long you’ll need coverage — then a permanent life insurance policy (whole life insurance or universal life insurance) may be a better option for you. While the cost is higher than term life, that concern is partly offset by the fact that these policies build tax-efficient cash value. A policy can be a valuable financial asset that can used for things like starting a business or funding a child’s education, and it can help ease estate planning as well.

There are two main types of permanent policies: Whole life insurance is simpler — the premium remains the same for life, the death benefit is guaranteed, and the cash value grows at a guaranteed rate. Whole life policies from a mutual insurer — like Guardian — may also earn dividends (if declared) that can enhance cash value growth, but these are not guaranteed. Universal life insurance can be less expensive, but the premiums, death benefit and cash value growth rate can vary, making the policy a bit more complex because it must actively checked and managed from time to time.⁷

Importantly, you don’t have to settle for a single type of coverage, because you can have two or more different policies. Many people who buy life insurance choose to get both term and permanent policies because each type offers different benefits. For example, you could choose to get a 20-year term policy with a significant death benefit while your children are still financially dependent on you, and also decide to choose in a permanent policy to provide lifetime protection — and a tax-efficient asset — for you and your spouse. .

4. Calculate how much coverage you need

The American Council of Life Insurers reports that the average size of an individual life insurance policy purchased in 2024 was $209,000.⁸ But that's just an average — the amount you need may be significantly higher or lower depending on where you are in life, and how many people rely on your income.

In general, the younger you are, the more coverage you may need to compensate for the years of potential wage-earning ahead of you. And the more people depend on you, the more coverage you’ll want to meet all their needs in the event of your untimely death. There are different ways to estimate your need, but one rule of thumb is to consider getting:

• up to 30X your income between the ages of 18 and 40

• 20X income at age 41-50

• 15X income at age 51-60

• 10X income for age 61-65

Of course, you’ll pay more for a policy with higher coverage, so you’ll need to weigh the level of protection you want against the premium you can afford.

5. Decide how to get life insurance — through work or as an individual

Your employer may offer coverage at work

Group term life insurance through work can be an excellent choice for a number of reasons:

• It's easy to get: Depending on the offering, you may not even have to answer health questions or have a medical exam.

• It’s easy to pay for: Premiums are typically deducted automatically from your paycheck.

• You'll get favorable group rates: Because companies are buying insurance for many people at once, they typically get favorable rates.

However, there can also be limitations. For example, workplaces may only offer one type of coverage (typically term), and the total coverage available may not be enough for your needs. And, of course, many companies don't offer any life insurance benefits. Or, you could be self-employed. Fortunately, it can be very easy to get coverage on your own.

Getting life insurance as an individual

Term life insurance is simple to shop for and get. Many insurance companies, including Guardian, make it simple to compare rates by giving you an instant online term life quote. Premiums may not be much higher than with a group term life plan, especially if you're healthy. And coverage isn't dependent on your company or employment status — as long as you keep paying premiums, your policy will remain in force until the end of the term.

Also, if you get a policy as an individual (as opposed to being part of a group) you have more options, starting with the fact that you don't have to get term coverage. You can opt for whole life insurance or universal life insurance that provides permanent, life-long protection as long as your premiums are paid that also builds cash value. No matter which type of individual policy you choose, most insurance companies will also let you tailor individual plans with riders (optional provisions) that can provide valuable added benefits. For example, many term life policies offer a convertibility rider that lets you change over to a permanent policy without getting a new life insurance medical exam. Permanent life policies are even more customizable. But if you decide to buy life insurance as an individual, consider talking things over with a life insurance agent or Financial Advisor who can help you decide whether term life, whole life, or another type of coverage is right for you.

6. Compare companies and policies

Your life insurance policy is only as good as the life insurance company that stands behind it. Here are two good ways to evaluate an insurer:

• Check customer service ratings: J.D. Power's life insurance ratings can give you insights into how happy customers are with a company's services.

• Check their financial ratings: Third-party agencies such as A.M. Best, S&P, and Moody's rate life insurance providers based on things like available cash flow, customer complaints, and acceptable risk. A higher rating indicates a more solid fiscal foundation and long-term financial health. As a reference, Guardian Life Insurance is currently rated in the highest tier for financial strength by the major ratings agencies, with top-level or near top-level grades across the board, and reports a Comdex of 99, placing it in roughly the top 1% of U.S. life insurers by aggregated financial strength.^9,10

7. Apply for your policy

Once you've considered what type of life insurance you should get, decided how much you need, and narrowed down the list of companies you want to work with, it's time to start the application process. If you’re working with a life insurance agent or financial advisor, they will go over your personal financial situation with you and review policy options. When you apply, the insurance company may ask for several details, including:

• Medical records and history

• Personal finances and annual income

• Primary care physician and other doctors

• Your occupation

• Lifestyle choices, such as tobacco use and dangerous hobbies

Expect a medical exam

If the policy you're applying for requires a medical exam (which is likely if you're applying for a significant benefit amount), the life insurance company will arrange for the exam and cover the costs. In most cases, a professional will contact you to schedule your appointment, and the examiner will come to your home or office. The exam usually only takes 15 to 45 minutes, depending on what's required. It may include any or all of the following:

• Names and dosages of any medications you have taken for a current or past health condition

• Names and contact information for all physicians you've seen during the past five years

• A list of any medical conditions you have, along with the date you were diagnosed, the physician's contact information, the type(s) of treatment received, and the treatment outcome

• Your height, weight, and vitals

• A urine sample

• A blood pressure reading

• Blood drawn for several tests, including nicotine and drug use

• Depending on the results, you may also be asked for other tests as you get your policy.

What if you're not in good health or have known health issues? There are "simplified acceptance" life insurance policies that do not require a medical exam and "guaranteed acceptance" policies that don't even ask medical questions. However, the life insurance cost per dollar of coverage is much higher, and protection amounts are typically limited. These policies aren't usually meant to provide significant income replacement and are more often used to cover final expenses.

Be patient during the underwriting process

Underwriting is where the insurance company reviews your application and determines if it meets their criteria. This can take as little as 24 hours but more often lasts 4 to 6 weeks. During that time, an underwriter will look over the details of your application, your health information, and your lifestyle to determine your insurance risk class. The larger the policy, the more detailed the underwriting process. Once it's completed, you'll find out if you were approved and at what rate. If you've been working with an experienced agent and no health surprises are uncovered, you're unlikely to have higher premiums than you expected.

Name a beneficiary

Your beneficiary is the person named on the policy documents to receive the death benefit if you pass away. You can name more than one beneficiary and assign each one a specific percentage of the payout. Typically, people name their spouse or children as beneficiaries, but those aren't your only options. You can also name a charity, a trust, your estate, or another person close to you as a beneficiary.

Guardian can help

If you’re thinking about life insurance but don’t have someone with whom to discuss your options, Guardian can help you find a nearby financial advisor who will listen to your needs and help guide you to the right solution.