Your beneficiaries can use the money to pay bills and other everyday living expenses, pay debts, pay for college and other things. Some types of life insurance also generate savings that you can use during your lifetime.

Not everyone needs life insurance. In general, life insurance is a good idea if you have family members or others who depend on you financially. There is no formula for deciding how much life insurance you need.

To decide the amount that is right for you, consider your debts, the amount of income your family must replace, and whether they will have bills to pay or other expenses.

You can buy life insurance directly from insurance companies and agents. Insurance companies use a process called underwriting to decide whether to sell you a policy.

This often includes having to pass a medical exam and answer questions about your health, work, and habits. A company may refuse to sell you a policy if it considers you a high risk because of your health or other reasons.

Some employers and groups, such as churches, unions and other associations, offer group life insurance to their employees and members. The underwriting criteria for group life insurance are not as strict.

What is term life insurance?

Term life insurance provides protection for a specified period of time. This period is called a term. The term can be from one year, or from five to 30 years or more.

What is permanent life insurance?

Permanent life insurance allows you to accumulate savings over time. You can withdraw, invest or use it to borrow against these savings. You can also use it to pay insurance premiums.