4 Tips to Consider When Buying a Life Insurance Policy for the First Time

By Dr. Jose G. Cardenas | Chief Tax Strategist, The C & R Group, LLC

When it comes to life insurance, the first purchase can feel overwhelming. You're not just selecting a policy — you're making a long-term financial commitment that directly impacts your loved ones' security. Whether you're a young parent, a business owner, or a high-income earner finally ready to establish your financial legacy, these four essential tips will help you start strong and select a policy that’s tailored to your needs.

1. Know Your Policy Options

Not all life insurance is created equal. The two main types are term and permanent life insurance. Term provides coverage for a set period (10, 20, 30 years), often at a lower cost. Permanent policies, such as Indexed Universal Life (IUL), provide lifelong coverage and include a cash value component that grows over time — making it a powerful wealth-building tool.

Understanding the difference between these types is critical. Term is great for covering specific obligations like a mortgage or children’s education, while permanent policies offer estate planning benefits and potential tax-free retirement income when structured correctly.

2. Determine How Much Coverage You Need

Start by calculating your current debts, future obligations (like college tuition), income replacement needs, and legacy goals. A good rule of thumb is to carry coverage that’s 10–15 times your annual income. However, this varies based on personal circumstances, family size, and other income streams.

Also consider inflation and lifestyle increases over time — your life insurance policy should grow with you or offer flexibility to adjust as your wealth expands.

3. Match the Coverage to Your Unique Needs

This is where working with a knowledgeable financial professional truly matters. Are you looking to build tax-free wealth? Do you want to supplement your retirement income down the road? Are you a business owner needing key person coverage or a buy-sell agreement? Each of these goals calls for different types of life insurance structures.

For many of our clients, we find that Indexed Universal Life policies offer the best of both worlds: protection for their families and strategic tax advantages as part of a broader retirement or estate plan.

4. Compare Quotes (But Don’t Just Shop by Price)

Yes, affordability is important — especially when you're just starting out — but don’t let price be your only decision point. Be sure to look at the insurer’s reputation, financial stability, policy features, and living benefits like chronic or terminal illness riders. These can make a massive difference down the line, especially when emergencies arise.

With dozens of top-rated carriers at our fingertips, we help clients compare plans based on quality, not just cost, ensuring you get long-term value and peace of mind.

Final Thoughts

Buying life insurance for the first time is a major milestone — and it deserves a strategy, not just a policy. At The C & R Group, we help our clients build a comprehensive protection plan that aligns with their wealth goals, lifestyle, and legacy. Whether you’re just starting your journey or preparing for the next financial chapter, we’re here to guide you every step of the way.

About the Author

Dr. Jose G. Cardenas is a retired U.S. Army Finance Officer (Major) and the Chief Tax Strategist at The C & R Group, LLC. He specializes in proactive tax planning, wealth strategies, and insurance-based retirement solutions for business owners, veterans, and high-income earners. Dr. Cardenas is affiliated with Experior Financial Group for life insurance and annuity offerings.

Disclosure

This article is for informational purposes only and should not be construed as personalized financial advice. Insurance products are offered through licensed agents. Individual results may vary based on personal financial situations and policy selection.

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