The primary reason to own life insurance is so that your beneficiary(ies) can receive a monetary payout — called the “death benefit” — if you pass away while you are covered under the policy. How much life insurance coverage you purchase is up to you. You can purchase an amount of coverage to correspond with what you’d like the death benefit to be used for — to pay for your final expenses, make up for the loss of your income so your family can cover their living expenses, finance care for a dependent with special needs, pay off debts or pay for your kids’ college tuition.

There may be good reasons for both spouses to have life insurance coverage. If your household is being supported by two salaries, the death of one spouse may cause financial hardship for the other, adding to the emotional pain. If you have a family, this financial stress can seem even more overwhelming. If your spouse is not employed now, they may need to start working if you die. And they will probably encounter new expenses as they learn to manage as a single parent — such as child care and household maintenance. Life insurance can provide immediate stability in the short run, and make things like paying for kids’ college education possible in the long run.

While the amount of life insurance you need depends on many factors, chances are very good that you need more than the amount of coverage you may receive automatically through your employer, which is often equal to your annual salary. If you are young and without dependents, coverage equal to one year’s salary may be enough to cover your funeral costs and some of your debts. However, if you’re middle-aged with a family that depends on your income to maintain their lifestyle, you’ll likely need much more coverage. You may also fall somewhere in between. One of our licensed agents can help you determine the amount recommended for your situation.

Yes, you can even have policies from multiple sources. For example, although you may automatically receive life insurance coverage from your employer, you may decide you need more coverage. In that case, you may choose to enroll for more coverage through your employer’s plan and pay the premiums through payroll deduction. Or you can choose to purchase a policy through your bank, credit union, financial professional or insurance agent. In the event of your death, both policies would then pay a death benefit to your beneficiaries.

If you’re enrolling for coverage at work, your employer chooses the insurance company for you. If you’re working with a financial professional or insurance agent, they may sell life insurance from multiple insurance companies, or just one if they’re affiliated with a specific insurance company. There are third-party organizations that rate the performance and financial strength of insurance companies. Search the websites of life insurance companies you are considering to find financial strength ratings from the rating agencies A.M. Best, Fitch Ratings, Moody’s Investor Service, and Standard & Poor’s.

If your employer offers life insurance, you can typically enroll as a new employee and be approved automatically, without having to go through what insurance companies call “medical underwriting” or “evidence of insurability.” If you are applying for life insurance on your own or after your initial enrollment for benefits through your employer, the application process usually consists of the following steps:

1. You complete an application
2. The insurance company may ask you to complete a health questionnaire
3. You may be asked to complete a physical exam
4. The insurance company informs you if your application for coverage is accepted or declined
The length of the process can range from two weeks to three months, depending on how much coverage you’ve chosen, your health history and how you applied for coverage.

Underwriting is the process insurance companies use to determine whether they can insure an applicant, at what amount and at what cost to the insured person. The underwriting for coverage you enroll in at work is typically faster and less rigorous than if you are buying coverage individually from another source. Since no two people are the same, underwriters analyze the risk factors unique to each applicant, which may include age, gender, current health, medical history, occupation, lifestyle habits and more. If the insurance company feels you present a greater risk — for example, if you are in poor health, have a dangerous occupation or are elderly — you may pay more for life insurance than a young, healthy individual — or be declined coverage entirely.

One of the benefits of having life insurance through your job is that a physical exam is not always required. Employer plans typically offer guaranteed coverage of some kind, either in the form of coverage they provide for you automatically, or coverage you can select when you’re first eligible for benefits as a new employee. After that initial period, it is common to complete a health questionnaire or medical exam when you enroll for coverage at work. If you’re purchasing an individual life insurance policy through a financial professional or insurance agent, or on your own, you may be required to have a physical exam before you are insured. In both cases, an exam is usually done in your home by a nurse, technician or paramedic, who will ask some questions about your medical history, take your vital readings, and take blood and urine samples. The insurance company may also request medical records from your physician or other healthcare providers to evaluate your level of risk.