Almost every conversation about life insurance comes down to one question: term or whole life? The honest answer for most Colorado families is "term" — but the longer answer matters.
Term life insurance
Term life covers you for a specific period — typically 10, 20, or 30 years. If you pass away during the term, your beneficiaries receive the death benefit, tax-free. If the term expires while you're still living, the policy ends.
Term life is dramatically cheaper than whole life for the same death benefit. A healthy 35-year-old can typically get $1 million of 20-year term coverage for $30–$50 per month.
Whole life insurance
Whole life covers you for your entire life and builds a "cash value" that grows tax-deferred. Premiums are typically 5–10× more expensive than equivalent term coverage. The cash-value component functions partly as a savings vehicle.
The honest framework
Buy term and invest the difference in retirement accounts is the right call for most families. Whole life makes sense in narrower scenarios:
- Estate-tax planning for high-net-worth families
- Funding a buy-sell agreement between business partners
- Lifetime support for a special-needs dependent
- People who max out retirement accounts and want additional tax-advantaged savings
How much do you need?
A good starting point: 10–15× your annual income, plus enough to pay off your mortgage and fund kids' college. Cassondra walks you through a needs analysis without pressure.
Frequently asked questions
- Is term or whole life insurance better?
- For most families, term life provides the most protection per dollar during the years you actually need coverage — typically while raising kids and paying off a mortgage. Whole life makes sense for specific estate, business succession, and special-needs planning situations.
- How much life insurance do I need?
- A common rule of thumb is 10–15× annual income, plus enough to cover your mortgage, debts, and future obligations like college funding.