When most people think about life insurance, the first question is usually simple: Do I even need it?
The answer, however, is rarely simple.
During our recent By Your Side Chat, Jessica Geary, CFP®, sat down with Elliot Coplin of Crump Life Insurance Services to walk through the fundamentals of life insurance planning—how to determine whether coverage makes sense, how much may be appropriate, and what options are available depending on your stage of life.
Learn how life insurance supports more than income replacement. Explore term, universal, and whole life policies, living benefits, long-term care riders, estate planning strategies, and why reviewing existing coverage is critical for your financial plan.
The biggest takeaway? Life insurance is not just about replacing income after a loss—it can also be an important tool for retirement planning, legacy planning, long-term care protection, and preserving wealth for the next generation.
How Do You Know If You Need Life Insurance?
Jessica explained that life insurance planning typically starts with a few key questions:
- Do you have dependents who rely on your income?
- Would debt create a financial burden for your family?
- Is there a mortgage that would need to be paid off?
- Are there future education costs for children or grandchildren?
- Are there final expenses or estate planning considerations to prepare for?
For younger families, life insurance often focuses on income replacement and protecting loved ones during working years. For retirees or high-net-worth households, the conversation often shifts toward estate preservation, tax efficiency, and legacy planning.
The right answer depends entirely on your personal financial picture.
How Much Coverage Is Enough?
This is one of the most common questions clients ask.
Jessica shared that there are several ways advisors evaluate coverage needs:
Needs-Based Analysis
This approach looks at practical obligations such as:
- Outstanding debt
- Remaining mortgage balance
- Future income needs for your family
- College or education expenses for children
Income Replacement Method
This method estimates how much income your family would need if your earnings were no longer there. It may involve multiplying your income by a set number of years or calculating the long-term value of your future earning potential.
Age-Based Multipliers
Elliot noted that for younger professionals with many working years ahead, a common starting point may be 20–25 times annual income, particularly when purchasing term insurance.
As retirement gets closer, that multiplier often decreases to 10–15 times income, since fewer working years remain and income replacement needs may decline.
Importantly, insurance companies also look at your total coverage—including policies you already own—not just the new amount you’re applying for.
Don’t Assume Health Issues Disqualify You
One of the biggest misconceptions around life insurance is that medications or health conditions automatically make someone uninsurable.
That simply isn’t true.
Today’s underwriting process is far more flexible than many people realize. Many clients taking medications for:
- Blood pressure
- Cholesterol
- Type 2 diabetes
- Other manageable health conditions
may still qualify for strong rates—and in many cases, may even avoid a full medical exam through accelerated underwriting.
For healthy applicants under age 60, some carriers can approve coverage without bloodwork, urine testing, or a paramedical exam. Elliot shared an example of a healthy 42-year-old receiving approval for $1.5 million of coverage in just 18 minutes.
The key is honesty.
Insurance companies verify prescription history, medical records, and even driving history. Trying to hide medical conditions usually creates more problems than simply disclosing them upfront.
Transparency helps secure the best possible outcome.
Understanding the Three Main Types of Life Insurance
Elliot described life insurance as a spectrum.
1. Term Insurance
Think of term insurance like renting a home.
It provides coverage for a set period—typically 10, 15, 20, 25, or 30 years—and offers the lowest cost premium.
This is often the best fit for:
- Young families
- Mortgage protection
- Income replacement during working years
- Temporary financial obligations
If nothing happens during the term, there is usually no payout—but you’ve had protection during the years you needed it most.
2. Universal Life and Indexed Universal Life
These policies sit in the middle of the spectrum.
They provide longer-term or lifetime coverage while also building cash value that may be used strategically later.
These policies can support:
- Retirement income strategies
- College funding
- Supplemental cash flow needs
- Estate planning goals
Because they provide more flexibility and permanence, they cost more than term insurance.
3. Whole Life Insurance
Whole life is the most permanent and often most expensive option.
It offers:
- Guaranteed lifetime coverage
- Consistent cash value accumulation
- Strong death benefit guarantees
Elliot compared whole life to the “luxury vehicle” of life insurance—higher cost, but maximum consistency and long-term benefits.
Living Benefits Matter More Than Ever
One of the most important modern advancements in life insurance is the addition of living benefit riders.
These may include:
- Long-term care riders
- Chronic illness riders
- Critical illness riders
- Terminal illness riders
This means you may be able to access your policy benefits while you’re still living—not just after death.
For example, if you experience a long-term care event, some policies allow you to use part of your death benefit to help cover those costs.
Jessica and Elliot emphasized that long-term care planning should be part of nearly every life insurance conversation.
Reviewing Existing Policies Is Critical
Many people own life insurance policies they haven’t reviewed in years.
That can be a problem.
Jessica noted that older cash value policies—especially those purchased in the late 1990s and early 2000s—were often built on assumptions that no longer hold true, particularly around interest rates and insurance costs.
Some policies may no longer be performing as intended.
If you have an older policy, it’s worth reviewing:
- Is the original goal still the same?
- Is the cash value still working in your favor?
- Are premiums increasing unexpectedly?
- Are better options now available?
In some cases, a 1035 Exchange may allow you to move cash value from one policy to another without triggering taxes—potentially improving benefits and modernizing coverage.
Final Expense and Second-to-Die Policies
For older clients or estate planning situations, there are additional specialized solutions.
Final Expense Policies
These smaller policies—often $5,000 to $25,000—help cover burial and final expenses and may be available even for individuals with significant health concerns.
Second-to-Die (Survivorship) Policies
These policies insure two people—typically spouses—and pay one death benefit after the second person passes away.
They are often valuable for:
- Estate tax planning
- Legacy planning
- Creating tax-efficient inheritances for heirs
- Covering large IRA-related tax burdens for beneficiaries
They can also be helpful when one spouse may not qualify for traditional coverage individually.
The Bottom Line
Life insurance is not a one-size-fits-all decision.
It should be reviewed as part of your broader financial plan—not as a standalone purchase.
Whether you’re protecting a young family, reviewing an old policy, planning for retirement distributions, or building a tax-efficient legacy for your heirs, the right strategy starts with understanding your options.
Sometimes the biggest mistake isn’t choosing the wrong policy—it’s never reviewing the one you already have.
If you have questions about your current coverage, whether you need more protection, or how life insurance fits into your retirement and estate planning goals, our team is here to help.
Sometimes the best place to start is simply asking the question: Is my current plan still working for me?
*This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.
Riders are additional guarantee options that are available to an annuity or life insurance contract holder. While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions, and the policy holder should review their contract carefully before purchasing. Guarantees are based on the claims paying ability of the issuing insurance company.