Life Insurance Guide for Homeowners

If you were to pass away, would you leave behind debt? Would your loved ones face a financial hardship? If the answer is yes, you need life insurance.

You especially need coverage if you are married, have dependents, own a home with a mortgage, own a small business, or would leave behind a sizable personal estate. If you are single with no dependents and wouldn't leave behind debts from business, personal, or medical expenses, you may not need coverage right now — but locking in a policy while young and healthy secures lower rates for the future.

The best time is as soon as it becomes a must-have in your life. Major life events that trigger the need include marriage, buying a home, having a baby, and starting a business. Buying while you're young and healthy locks in significantly lower premium rates.

Important: If you're planning to have a baby soon, it's best to secure coverage before pregnancy to ensure you don't face higher premium rates.

There's no one-size-fits-all answer. The right amount depends on your unique circumstances. Consider: How much do you contribute to your household income? Do you want to save for your children's college education? Would your loved ones be financially prepared to cover funeral expenses? How much debt (mortgage, auto, student loans) would you leave behind? How will inflation affect these numbers over time?

Keep in mind that your policy can grow with you — so there's no wrong answer to start. A free consultation can help you determine the right coverage amount.

This rider lets you access a portion of your death benefit while you're still alive if you're diagnosed with a qualifying critical, chronic, or terminal illness. You choose how to spend the money — medical expenses, exploratory treatments, making up for lost income, mortgage payments, or anything else. Many modern policies include this rider at no extra cost.

Pays a lump sum benefit if you are diagnosed with a covered critical illness such as cancer, heart attack, or stroke. The money is yours to use however you see fit — medical bills, mortgage payments, household expenses, or anything else your family needs.

Often called "paycheck protection," disability coverage replaces your income if you're unable to work due to a short-term or long-term disability. This can cover workplace injuries, disability claims, and even pregnancy. Use it to pay your mortgage, cover medical expenses, or handle monthly bills while you recover.

Available on term life policies, this rider reimburses you for a portion (usually 75%–100%) of the premiums you paid if you outlive your coverage term without needing to use the policy. It does increase your monthly premium, but many people appreciate the "cash-back" safety net.

After the insured person passes away, the beneficiary submits a few documents to the insurance company — typically a death claim form, a certified copy of the death certificate, and any additional information the company requires. If you're a beneficiary and aren't sure where to begin, reach out to the insurance agent who helped write the policy or contact the insurance company directly.

In most cases, your loved one would inform you that you are their chosen beneficiary. If not, look for insurance documents — an old policy statement or bill may list the beneficiary. You can also contact the insurer directly to check if a policy was in force. Insurance companies generally are not required to reach out to beneficiaries, so it falls on you to determine if your loved one had a policy naming you.

Tip: To avoid the emotional stress of tracking down this information, have these conversations with your loved ones before it's too late.

A premium is the monthly, quarterly, or annual payment you make to an insurance company to keep your policy active (also known as "in force"). As long as you pay your premium, your coverage remains active and your beneficiary is protected.

Premium payments for individual life insurance policies are generally not tax deductible. However, the death benefit paid to your beneficiary is typically received as tax-free income. Any interest accumulated on a life insurance policy would usually need to be reported as income by the recipient. Consult a tax professional for guidance specific to your situation.

A pre-existing condition doesn't necessarily mean you can't get life insurance — but you might pay higher premiums. When you apply, you'll answer questions about your health, age, and lifestyle. Working with an independent broker like Arete Wealth & Protection is especially valuable here: we can evaluate which carriers are most likely to approve your application and find the best rate for your situation.

Yes. If you have diabetes, you can still qualify for certain types of coverage. In some cases, your premiums might be a bit higher. An independent broker can shop multiple carriers to find the one most likely to offer favorable terms for your specific health profile.

In some cases, yes. Certain policies allow you to access accelerated death benefits to cover long-term care expenses under specific circumstances. Standalone long-term care insurance policies are also available. Life settlement options may be an option as well. These vary by carrier, so it's worth discussing with a licensed advisor to understand what's available for your situation.