Let’s be honest—life insurance 101 is one of those things we all know we should look into… but don’t. It feels confusing, a little overwhelming, and pretty easy to push down the to-do list.
But here’s the thing: it’s way simpler than you think. And no, it’s not just for folks with white picket fences and retirement plans. It’s actually one of the most practical, protective moves you can make—especially if you love someone, or you’re building something for the future.
So let’s break it down together:
What life insurance 101 really is, how it works, and why it might make sense for you—whether you’re 28 and just starting out… or 58 and starting over.
Table of Contents
So what is life insurance, really?
Understanding Life insurance 101 can empower you to make informed decisions about your financial future.
In plain terms? It’s a plan that helps protect the people you love—financially—if something happens to you.
You pay a recurring amount (called a premium), and in return, the insurance company promises to pay a set amount of money (that’s the death benefit) to your chosen people (your beneficiaries) if you pass away while your policy is active.
That payout can help cover funeral costs, make up for lost income, pay off debts, or even set your kids or grandkids up with a better future.
It’s less about money and more about peace of mind.
Term or permanent? Think of it like renting vs. buying
There are two main types of life insurance that most folks start with:
1. Term life insurance
This is like renting. You pay for coverage for a specific period of time—say, 20 or 30 years. It’s the most affordable option for most families, and if you pass away during that time, your beneficiaries get the full payout.
If you outlive the term? The policy ends, and that’s that. Simple.
2. Permanent life insurance
Now this is more like owning. It lasts forever (well, for life), and it builds something called cash value—a savings component you can borrow from, use, or let grow. It’s got more flexibility and long-term potential, but usually costs more up front.
Not sure which one’s best for your stage of life? That’s what we’re here for.
So… how much does life insurance actually cost?
Short answer: probably a lot less than you think.
The cost of life insurance depends on a few things:
- Your age
- Your health
- The coverage amount (aka how much protection your people would get)
- The type of policy you choose
Here’s a real example: a healthy 35-year-old could get a term policy for around $25/month. That’s less than a dinner out—or a couple of lattes a week.
Why would I need life insurance?
This is the heart of it. Life insurance isn’t just about you. It’s about the people who depend on you now—or could benefit from your planning later.
You might want coverage if:
- You’ve got a spouse or partner who relies on your income
- You want to make sure your kids or grandkids are provided for
- You’re taking care of aging parents
- You don’t want your loved ones burdened by final expenses
- You’re thinking ahead and locking in lower premiums while you’re young and healthy
Even if you’re single or starting over, life insurance can be a smart foundation to build from.
What happens when a life insurance policy pays out?
If you’re paying your premiums and something unexpected happens, your beneficiaries get the full death benefit—usually tax-free.
Here’s what that money can help with:
- Mortgage or rent
- Daily expenses (groceries, bills, childcare)
- Paying off debt
- Education funding
- Funeral and memorial costs
- Leaving a legacy—or even funding a grandchild’s first car or college
It’s not about planning for tragedy. It’s about preparing—so no one you love has to face financial stress while grieving.
What happens if I don’t die?
Fair question 😅
- With term life: If you outlive the policy, there’s no payout—but you had protection during the years you probably needed it most.
- With permanent life: The policy stays in place for life (as long as you keep paying), and your cash value continues to grow—which you can use while you’re still living!
Some families even use their permanent life policy as a tool to build generational wealth—something we love talking about here at JT Life Group.
Let’s bust a few common myths
- “I’m too young for life insurance.”
Actually, this is the best time. It’s cheaper, and easier to qualify when you’re healthy. - “I don’t have kids, so I don’t need it.”
Kids or not, if you have people you care about—or just want to lock in lower premiums now—it still matters. - “Life insurance is too expensive.”
Basic term policies are surprisingly affordable. You might spend more on snacks or streaming subscriptions.
A quick summary: how life insurance works (in four steps)
- You choose a policy that fits your needs and budget.
- You pay a monthly or yearly premium.
- If something happens to you while the policy is active, your family gets a payout.
- If you choose a permanent policy, it builds cash value you can use over time.
Final thoughts
Life insurance isn’t just for the rich, the old, or the “settled.” It’s for the protectors. The planners. The pivoters.
Whether you’re starting a family, starting over, or just getting serious about your financial future—this is a simple, powerful place to begin.
And you get to choose a policy that works for your life—not the other way around.
💬 Need help figuring out what kind of coverage makes sense for you?
Let’s talk it through—zero pressure, just real guidance. Contact me here or get a free quote. I’m here to make it simple.
Want to educate yourself a little more? Here are two great sites:
If you’re new to insurance and want to learn more about your consumer rights and how insurance works, the National Association of Insurance Commissioners (NAIC) offers a wealth of easy-to-understand resources and guides.
For a straightforward breakdown of different types of insurance, including life, health, auto, and home, check out the Insurance Information Institute (III). Their educational content is perfect for anyone starting their insurance journey.
