Buying life insurance is a process, and there is a market for insurance products. First, evaluate your financial needs and goals, and what type of coverage is best for you in order to cover those needs and goals in the event of an untimely death. Make sure you decide on both the right type of coverage (e.g., term vs. permanent) and the correct death benefit amount. Then, shop around for the most affordable coverage from a reputable insurer that can meet your needs.

Life insurance companies typically pay out death benefit money within 60 days of making a valid claim.

First, determine how much coverage you need. There are several rules of thumb for arriving at the right amount of coverage, such as replacing several years of lost income along with any debts and other obligations you may owe now or in the future.

Next, decide whether term or permanent insurance is best for you. Term policies have lower premiums but they expire after a set number of years. They also do not accrue any cash value.

Regardless of type, insurance premiums will increase with age and are more expensive for those in inferior health.

Death benefits on life insurance policies are given to beneficiaries income tax-free. If, however, the death benefit increases the value of the deceased’s estate over the estate tax limit, it may be subject to estate tax.

The younger and healthier you are, the lower the premiums on any life insurance will be. Therefore, many recommend buying a policy in your 20s if possible, even if you feel that you don’t “need” it at the time.