4-step guide to life insurance

Our promise to help you protect what matters most

At TIAA, we understand the need for
life insurance…our promise is to help
you make the right choice.
Chances are you may already have some life insurance—either
through your employer or an individual policy you bought in
the past. But are you sure you have enough? If you’ve had a big
change in your life since you last bought insurance—marriage,
a new baby, buying a new home or a child getting ready for
college—you might need more coverage.
TIAA-CREF Life Insurance Company (TIAA Life) can help you decide what policy
type and amount are appropriate for you and your family. We have a wide variety
of flexible life insurance products to help protect you and your family, no matter
what stage of life you’re in or how your needs might change over time.

Using this guide

This guide takes you through the four easy steps to finding and maintaining the
right coverage for you and your family:

Step 1 Learn why and when you need life insurance.

Step 2 Determine how much coverage you need.

Step 3 Decide which type of life insurance to buy.

Step 4 Review your life insurance coverage periodically.

Call a TIAA life insurance representative1 today

for more details.
1 Allsolicitations pertaining to a contract for insurance may only be handled by an agent or broker
licensed to engage in the business of insurance in the state in which you reside.
Life insurance can help you keep
your promises.

1 4-step guide to life insurance

Step 1: Learn why and when you need
life insurance
Simply put, life insurance gives your family or business greater peace of
mind after you die. It’s money they can use to help pay the mortgage, run the
household, maintain the lifestyle you’ve worked so hard to provide or help
transition your business. It can also help ensure that your family or business
partner won’t be burdened with debt. Without enough life insurance, assets like
your home or business might have to be sold to pay outstanding bills.

It’s important to think about life insurance when you experience

major milestones. Check all that apply to you:
n getting married, divorced or remarried n changing jobs

n starting a family n preparing for retirement

n t aking care of family members with

n taking on a new or bigger mortgage
special needs

n managing substantial student loans n caring for an aging parent

n saving for your children’s or grandchildren’s education n planning your estate

n getting a raise n starting or growing a business

If you checked one or more boxes above, you may need more life insurance
Any one of these life events can trigger the need for additional life insurance.
Even if you already have some insurance, there’s a good chance you might not
have enough—or the right kind. That means the people who matter most to you
could suffer financially if something unexpectedly happens to you.

35 percent of all households

would feel adverse financial impacts within one
month if a primary wage earner died.2

2 Facts from LIMRA 2018 Insurance Barometer Study reference: limra.com/barometer.

2 4-step guide to life insurance

The importance of life insurance
While it is easy to procrastinate when it comes to buying insurance, we never
know what the future holds for us. So it’s important that we have sufficient
insurance in place at all times in case the unthinkable happens.

How life insurance works

When you buy a life insurance policy, regardless of the type, its foundation works
this way.
1. The insurance company agrees to pay your beneficiaries a specified amount of
money when the insured person dies, as defined by the policy.
2. You pay for the policy by making premium payments. The premiums you pay
depend on your age, gender, health and lifestyle, the kind of insurance you buy,
and any extra features and riders you add to the policy.
3. Your beneficiaries generally won’t have to pay income tax on the money
they receive from your insurance policy according to current IRS regulations
(see IRC Section 101(a)).

A key benefit of life insurance is its tax-advantaged death benefit.

Life insurance policies contain exclusions, limitations, reductions of benefits and

terms for keeping them in force. A life insurance representative can provide you
with costs and complete details.

4-step guide to life insurance 3

Step 2: Determine how much coverage
you need
Depending on your personal situation, both you and your spouse or partner may
each need life insurance equal to at least 10 times your annual salaries. This
amount can help your family:
WW Pay your final bills and cover their daily expenses for a few years
WW Set up reserve funds for emergencies or for college
If you have other long-term needs, higher amounts of protection may be
more appropriate.

Protecting your spouse or partner is important

Even if your spouse or partner doesn’t work full time, it’s important that they
own an adequate amount of life insurance protection. Their income may not
be substantial, but their contribution to your household is significant. Imagine
if you had to hire someone to handle all of those responsibilities. It’s been
estimated it would cost more than $162,581 a year to hire someone to do all the
tasks a stay-at-home spouse manages.3

To get a quick idea of how much coverage you and your spouse or partner may
need, complete the worksheet below. For a more in-depth analysis, complete the
worksheet on page 6 or use our interactive calculator at TIAA.org/needscalculator.

A quick estimate:
For you For your spouse or partner
Enter your gross
$ __________________ $ __________________
annual income.
Multiply by 10 x10 $ __________________ x10 $ __________________
Subtract any existing
individual or group life – $ __________________ – $ __________________
insurance protection.
Suggested
$ __________________ $ __________________
coverage amount:

3 Salary.com’s 2018 Annual Mom Salary Survey, https://www.salary.com/articles/stay-at-home-mom.

4 4-step guide to life insurance

I promise to give you a safe home.

Common expenses and costs

When calculating how much life insurance you need, remember to cover future
expenses and set up sufficient funds for college or loan repayments. Use the
following information to help you accurately complete the detailed estimate on
page 6.

Funeral expenses
A typical funeral costs an average of $7,000 to $10,000, depending on your local
funeral service cost and the type of burial service you choose.
Source: Parting.com, https://www.parting.com/blog/funeral-costs-how-much-does-an-average-funeral-cost/.
September 14, 2018.

Probate costs
Estate probate and administration costs are usually about 3% to 8% of the total
estate value. The exact amount depends on how complex your estate is and
where you live.
Source: How Much Does Probate Cost?
https://www.thebalance.com/how-much-does-probate-cost-3505268. August 21, 2018.

Standard of living
In general, your family may need about 75% of your total family income to
maintain its standard of living. This figure assumes your mortgage has been paid
off. If it hasn’t, you’ll need to use a higher percentage.

College costs
The average annual cost of a four-year college education can range from $37,430
at a public institution to $48,510 at a private institution. These ranges are based
on average annual costs for 2018-2019 and include tuition, room and board,
books, and incidentals.
Source: Trends in College Pricing 2018, The College Board, New York, NY.

4-step guide to life insurance 5

A more detailed estimate
It may make sense for you to complete this more detailed estimate if you own
multiple assets as well as other insurance policies. This estimate takes into
account what you have now, how much you owe and how much your dependents
will need when you die. To complete this worksheet, you’ll need to refer to your
latest financial statements. For a personal needs analysis, please contact one of
our life insurance representatives.

What you have now (A)

Bank accounts + $
Taxable investments and savings, other than your home and
+ $
other real estate
Real estate you own other than your primary residence + $
Individual life insurance policies + $
Group life insurance policies + $
Total of what you have now =A $

What your dependents may need (B)

Debt and expenses due at your death
Funeral and burial expenses + $
Final income taxes + $
Estate probate and administration costs + $
Mortgages and loans not covered by insurance + $
Credit card debt + $
Subtotal $
Living expenses
75% of your total family income (before tax) x the number of
+ $
years your dependents will need it
Emergency fund (3 to 6 months of income) + $
Children’s education
Average annual potential cost x average number of years in
+ $
college x number of children
Total of what your dependents may need =B $

6 4-step guide to life insurance

Do you have enough life insurance?
After you’ve completed the detailed estimate, complete the calculation below to
learn if you have enough life insurance or if you may need more.

Your totals from page 6

Total of what your dependents may need (B) B $

Total of what you have now (A) -A $

How much estimated life insurance you need (B-A) =C $

If C is positive, you may need more life insurance.

If C is negative and your estimates are realistic, your dependents may be able to
manage without additional life insurance.

I promise to be loyal.
7 4-step guide to life insurance
Step 3: Decide which type of life
insurance to buy
There are two basic kinds of life insurance:

simple, affordable coverage you buy for a set

Term insurance period of time
combines lifetime coverage with the potential for
Permanent insurance cash value accumulation

Understanding the differences

Choosing between term and permanent insurance can be compared to the
difference between renting and buying a home.
Term insurance is like renting a home
Term insurance is a good choice if you need protection for the shorter term or
have limited resources to pay for coverage. Monthly premiums are usually lower,
but some policies can increase in cost as time goes on. Like renting, with term
life insurance you don’t build up any equity or cash value—when the policy term
ends, so does your coverage.

Permanent insurance is like buying a home

When you buy your home, your monthly costs may be higher than renting, but
your mortgage payments help you build equity over time. Likewise, permanent life
insurance provides you with long-term protection. Premiums are usually higher than
they are for term insurance, but potentially build cash value—funds you can easily
access by making withdrawals or taking out a loan.4 (Certain restrictions may apply.)

 general rule of thumb: The longer you need life insurance

A
protection, the better value permanent insurance can be.
If you need protection for the shorter term, term insurance
may be a better choice.

4 Partialwithdrawals or outstanding loans and loan interest will reduce the policy’s death benefit and may
have tax consequences. If the policy is classified as a Modified Endowment Contract (MEC) under IRS
rules, distributions are generally subject to income taxes and, if made before age 591/2, a federal tax
penalty. Taxes may be incurred if the policy is allowed to lapse before maturity.

8 4-step guide to life insurance

Deciding between term and permanent life insurance
The right kind of insurance for you will depend on why and for how long you need
insurance. To help make this decision, ask yourself these questions:
WW Why do I need life insurance? WW How long do I need the protection?
WW How much protection do I need? WW How much can I afford to pay?

Steps 1 and 2 helped you answer these questions. Use these answers as you
review the differences between term and permanent insurance. Whether you
select term or permanent coverage, life insurance is one of the most important
steps you can take to help protect your family’s financial future.5

Term
For a specified period of time,
Protection
typically 10, 20 or 30 years.
Typically an initial lower cost than
Premiums permanent insurance, with level
premiums for that time period.
Typically no opportunity for
Potential potential cash value.
cash value
Permanent
Designed to provide lifelong protection and
often has cash value features.
Often higher initial cost than term, but
generally level premiums for life.
Your net premiums have the potential to
accumulate cash value and grow tax deferred.
You have convenient access to your cash
value through loans and withdrawals.6

5 These are typical differences between term and permanent life insurance. The features and benefits
of the policy you choose may differ based on the issuing company, product and other factors.
6 Certain limits or restrictions may apply.

Access TIAA Life online resources for more information.

TIAA.org/policychoices
Contact one of our life insurance representatives.

9 4-step guide to life insurance

Step 4: Review your life insurance
coverage periodically
Life insurance coverage can best meet your needs when you review it regularly.
Changes to your family, finances, employment or health may affect how much and
what type of life insurance you need. Review your life insurance every one to two
years or sooner if you have experienced one of these changes:

Re-evaluating your coverage:

Family
n Have you married, divorced or remarried?
n Did you welcome a new child to the family?
n Are you a single parent with children who depend on you?
n Did you lose a family member?
Finances
n Have you purchased a home?
n Are you saving or paying for college?
n A re you financially supporting a new baby, aging parent, adult children, or a special needs child
or grandchild?
n Do you have student loans or other substantial debt?
Employment
n Have you changed jobs?
n Have you started a business?
Health
n Has your health changed?

Review your coverage today with our online resources

or call for more information.
TIAA.org/2minutereview
Contact one of our life insurance representatives.
10 4-Step Guide to Life Insurances
I promise to be your guide.

We stand behind our promise

TIAA Life has a wide variety of flexible life insurance products to help protect you
and your family, no matter what stage of life you’re in or how your needs might
change over time. Live more securely knowing you’ve made a smart decision to
help protect your loved ones with life insurance from TIAA Life:
WW  igh ratings for financial strength.7 TIAA Life is one of the three highest rated
H
insurance companies in terms of overall financial strength.8
WW World’s most admired companies. We’re one of the world’s most admired
companies in the life and health insurance category for over 5 years.9
WW Personalized strategies. We can help you determine your life insurance needs
and discuss your options. Our life insurance representatives:
–– Provide no-obligation guidance focused on your unique needs
–– Give easy-to-understand explanations
–– Can help you with the application process
–– Never pressure you to buy
WW Life insurance designed for your needs. Our entire lineup of life insurance
policies offer flexible, affordably priced plans to help provide the right
protection for you and your family.

7 Forits stability, claims-paying ability and overall financial strength, TIAA-CREF Life Insurance Company is
a member of one of only three insurance groups in the United States to hold the highest rating available
to U.S. insurers from three of the four leading independent insurance company rating agencies.
TIAA-CREF Life Insurance Company (TIAA Life) is a wholly owned subsidiary of Teachers Insurance and
Annuity Association of America (TIAA). TIAA Life holds the following ratings as a result of its relationship
with TIAA: A.M. Best (A++ as of 6/18), Fitch (AAA as of 6/18) and Standard & Poor’s (AA+ as of 10/18),
and the second highest possible rating from Moody’s Investors Service (Aa1 as of 9/18). There is no
guarantee that current ratings will be maintained. The financial strength ratings represent a company’s
ability to meet policyholders’ obligations and claims and do not apply to variable annuities or any other
product or service not fully backed by TIAA Life’s claims-paying ability. The ratings also do not apply to
the safety or the performance of the variable accounts, which will fluctuate in value.
8 For the current financial strength ratings, please visit TIAA.org/ratings.
9 TIAA-CREFLife Insurance Company is part of the TIAA family of companies. TIAA-CREF was rated in
the top 10 in FORTUNE® magazine’s World’s Most Admired Companies ranking in the Insurance: Life
and Health category for the years 2011, 2012, 2013, 2014, 2015, 2016, 2017 and 2019.
4-step guide to life insurance 11
Live more securely now.
Speak with one of our life insurance
representatives for complimentary, no-obligation
guidance, or visit TIAA.org/life.

12 Single Premium Immediate Annuities

13 4-step guide to life insurance
Investment, insurance and annuity products are not FDIC insured, are not bank
guaranteed, are not bank deposits, are not insured by any federal government
agency, are not a condition to any banking service or activity, and may lose value.
Life insurance is underwritten by TIAA-CREF Life Insurance Company (TIAA Life),
which is a wholly owned subsidiary of Teachers Insurance and Annuity Association of
America (TIAA). Both TIAA and TIAA-CREF Life Insurance Company are headquartered
at 730 Third Avenue, New York, NY 10017-3206. Each of the foregoing is solely
responsible for its own financial condition and contractual obligations.
©2019 TIAA-CREF Life Insurance Company (TIAA Life), 730 Third Avenue, New York, NY 10017
837147 818600_951597
141032199 A13749–Generic (04/19)