I got a $1 million life insurance policy at age 28, and now that I have a family I don't regret it for a minute

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How i chose life insuranceLayland Masuda/Getty ImagesHe got life insurance before he ever needed it. The author is not pictured.

Life insurance is an important part of any long-term financial plan.

If anything happens to you, life insurance ensures your family can weather the financial loss of your regular income. Before I had kids, I found myself a $US1 million life insurance policy.

Let’s walk through how I picked that life insurance and what I would do if I were doing it again today.

First, I decided term life insurance was right for me

When getting started, life insurance can be intimidating. There are different kinds of life insurance with different features. In general, the best type of life insurance for most people is term life insurance. Term life is the lowest cost for the most coverage in most cases.

Whole life insurance includes an investment component, but you can often do better separating your investments and insurance to get the best from both rather than an expensive, mediocre product that tries to do both. Whole life can make sense for some situations, but overall term life, is best in most cases.

Then, I multiplied my annual income to estimate my coverage needs

I picked my life insurance when I was around 28 years old. At that point, I knew I was going to have kids at some point and life insurance would only get more expensive if I waited. Typically the cost of insurance goes up as you get older, so the best deal you’re going to get is right now in most cases.

Our partner Policygenius can help you compare policies and rates »

At that point, I took my annual income, multiplied by 10, and added a buffer on top. That led me to a $US1 million policy. Many people would multiply their annual expenses by 10 rather than their income, but I estimated my expenses would go up when my family started to grow. You may also want to add in coverage for things like paying off a mortgage, paying for college costs, or other major financial goals for your family.

I shopped around for the best deal

There are a few ways to get life insurance. Online aggregators like Select Quote and Policygenius are a great choice. I wanted to get help from someone I knew who was an expert in life insurance, so I went to my friend Jeff Rose of the blog Good Financial Cents, a licensed insurance agent who could help me shop around for the best deal.

He ran my information through a system that gave the best deal for my specific needs and the policy I wanted. The insurance company sent a nurse to my home on a Sunday morning for a quick exam and I had my insurance offer shortly after.

Due to childhood asthma, I didn’t get the very best rate possible. I qualified for the second tier, which put my cost for a $US1 million policy at $US78 per month. That is a pretty good deal for so much coverage.

If I were going to do it today, I’d get a bigger policy

If I were going to get life insurance today, I would go through a similar process. However, these days my income and expenses have both gone up, as I expected. But based on my new numbers, I would have picked even more coverage than that $US1 million. If I were going for a do-over today, it would be for a higher amount.

Now I do have those kids I was planning on, and I would definitely add coverage to help with their college and our expensive California mortgage. But I don’t regret getting life insurance for a moment. It was a great decision and one I implore more parents to follow.

Our partner Policygenius can help you find the policy and the rate that’s right for you »

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