Eleos Life explains the essentials of term life insurance

New jobs, growing families, and new homes are all part of life’s biggest changes. Planning for the unexpected, however, can be more difficult. In a five-part series, Eleos Life CEO Kiruba Eswaran is walking through life insurance step by step, starting with one of the simplest forms of coverage: term life insurance.

We Are Austin host Trevor Scott spoke with Kiruba Eswaran, CEO of Eleos Life, about how term life insurance works, how families can figure out how much coverage they need, and what to weigh before buying a policy.

Watch the full video above for the first conversation in our five-part "Life Happens" series with Eleos Life.

Where should a family start?

Eswaran says the first step before buying insurance is to build an emergency savings fund.

"Savings is for really high-frequency, low-impact events, like your car breaks down or something stops working at your home," Eswaran explained. "Insurance is really about high-impact, low-frequency events that savings can't match."

He recommends beginning with enough cash to cover one month of essential expenses, then working toward a goal of three to six months.

What term life insurance means

Term life insurance protects a person for a set period of time, usually in exchange for regular premium payments. If the policyholder dies while the coverage is active, the named beneficiaries generally receive the death benefit.

Since the protection ends when the term expires, these policies are usually less expensive than permanent life insurance.

Eswaran advises using a needs-based approach to decide how much coverage to buy.

"What are the financial obligations that your income is supporting? It might be rent. It might be paying off the mortgage, your children's educational expenses," he said.

Those obligations can help determine both the amount of coverage and how long the policy should last.

How to choose coverage

Eswaran also explained the difference between independent agents, who can offer policies from several insurers, and captive agents, who work for just one company.

"I would always recommend going with someone who has access to multiple insurance options," he said.

Buyers should also look at an insurer’s financial strength and decide whether optional features called riders are useful for their situation.

Term life insurance can be especially helpful for people whose financial responsibilities have a clear endpoint, such as a mortgage or raising children through school.

In the end, knowing what a policy covers, how long it lasts, and what it costs can help families make better decisions.

Keep watching "We Are Austin" for more conversations in the five-part "Life Happens" series with Eleos Life.

Visit Eleos Life online for more information.

Insurance products, availability, premiums, and coverage vary. Review policy terms and consider your individual financial needs before purchasing coverage.