Care workers spend their working lives around what happens to families when someone can no longer work. It is the group least likely to have thought about their own. This is the plain version, with nothing to sell.
What does life insurance actually do?
It replaces your income for the people who depend on it, if you die while they still do. That is the whole purpose. Everything else sold alongside it is a variation on that idea or an investment product wearing its clothes.
What is the difference between term and whole life?
Term covers a fixed number of years — commonly ten, twenty or thirty — and pays out only if you die within that period. It is by a wide margin the cheapest way to cover the years your family would struggle without you, which is normally the years until children are grown and any mortgage is paid.
Whole life covers you for life and builds a cash value. It costs considerably more for the same death benefit. It has genuine uses in estate planning and for permanent needs, and it also pays the seller far more, which is why it is recommended more often than the arithmetic supports.
If someone recommends whole life, ask them to show you the term premium for the same cover so you can see the difference and decide.
How much life insurance do I need?
Start from what would have to be paid if your income stopped: the years until dependants are independent, the balance of any mortgage, and final expenses. A common rule of thumb is a multiple of annual income, but a rule of thumb is not a calculation, and a licensed agent should do the calculation with you rather than quote you the rule.
Do I need a medical exam?
Some policies require one and some do not. No-exam policies are quicker and, for the same cover, generally more expensive, because the insurer is pricing the uncertainty. If you are in reasonable health, the exam usually pays for itself.
What should I ask before signing?
Ask whether the premium is guaranteed level for the whole term or can rise. Ask what happens at the end of the term. Ask whether it is convertible to permanent cover without a new medical. Ask who the beneficiary is and confirm it is still the right person — an out-of-date beneficiary is the most common and most painful error in this whole subject.
And ask how the agent is paid. A licensed agent will tell you.
What about health and auto cover?
Two things worth checking if you work in care. Many part-time and county-paid workers get no employer health plan and do not realise that Covered California subsidies are income-based, or that Medi-Cal covers people below the income threshold at no cost. And if you drive between clients, ask your auto insurer in writing whether your personal policy covers you while you are working — that gap is usually discovered after a collision.
How do I check an agent is licensed?
Every insurance agent in California is licensed by the Department of Insurance, and you can look up a licence and any disciplinary history at insurance.ca.gov. Do it before you buy anything from anyone, including anyone we introduce you to.
Where to get help
Unified Savers is free for California healthcare workers. If you want to talk it through with a licensed agent, tell us what you are looking at.
Unified Savers is not an insurance company, agency or broker and does not sell insurance. Nothing here is a quote, an offer of coverage, or advice about which policy suits you.