Insurance
Own term insurance you control, and never let anyone sell you insurance as an investment.
At a glance
- Life, disability and health coverage each protect the paycheck from a different risk.
- Employer coverage is a floor, not a plan. It ends when you leave.
- Own term insurance you control. Never buy insurance as an investment.
- At retirement, the survivor option or SBP is a separate decision.
Insurance is the part of the plan that protects the paycheck. If you die, get hurt, or get sick, someone still has to pay the mortgage and feed the kids. This step is about owning enough of the right kind of coverage, and not a dollar of the wrong kind.
Reviewed by Theron Morgan, CEO and founder, Avidity Capital Inc., a registered investment adviser, on 2026-10-07.
What this step covers
Three things can take a paycheck away: death, a disability that keeps you from working, and a health bill that wipes out savings. Each one has its own kind of coverage. Life insurance replaces the income your family would lose. Disability coverage replaces your income while you are alive but unable to work. Health coverage keeps a hospital bill from becoming a second mortgage.
Employer coverage is a floor, not a plan. The life insurance your employer provides is a real benefit, but it is usually small, it is tied to the job, and it ends when you leave, right when a new policy costs more because you are older. The plan treats it as the starting point and asks what is still missing.
The rule in this step is simple: own term insurance you control, and never let anyone sell you insurance as an investment. Term coverage is pure protection for a set number of years. It is cheap while you are young and healthy, and it does its one job well. Policies sold as investments cost far more for the same coverage and leave families underinsured.
At retirement there is one more decision in this family: the survivor option on a pension, or the Survivor Benefit Plan for a military retiree. It is a one-time election that shapes both your check and what your spouse receives. The Retirement Planning step and your adviser cover it in detail.
For Hanford PD officers
The City pays the premium on a group life and accidental death policy for sworn officers. The amount is set in the HPOA memorandum of understanding, section 2.15, and it is a floor, not a plan: it ends when you leave the department. The City also lets you buy additional coverage at your own expense through the same group. Under the same section, the City provides six months of health coverage to the surviving spouse and dependents of an officer who dies in the line of duty.
If you are hurt on duty, workers' compensation and the CalPERS disability retirement rules for safety members are the first line. Those rules belong to the City and to CalPERS, and the right first call is your department's personnel office and CalPERS, not a sales agent.
Your pension carries its own survivor decision. The survivor option you elect at retirement, and the CalPERS death benefit the City provides under MOU section 2.17, decide what your spouse keeps. Term life covers the years before that election exists.
For NAS Lemoore sailors
While you serve, SGLI gives you life insurance at a low cost, and FSGLI can cover a spouse up to a capped amount. Both are tied to your service. SGLI ends shortly after you separate, and converting it to VGLI costs more as you get older. A term policy you own fills the gap and goes with you when you leave.
TRICARE handles the health side while you serve. The gap most families miss is disability: if an injury ends your career early, the military disability system decides what you receive, and a civilian policy is hard to buy once you are hurt.
At retirement, the Survivor Benefit Plan is a separate election about continuing income to your spouse. The app's survivor scenario shows what your spouse keeps with and without it.
What the app does in this step
The pay-yourself-first plan includes a term life step for every adult in the household. The survivor scenario on the Retirement tab shows what your household keeps if you die first, with and without a survivor option or SBP. The military family checklist carries the SGLI beneficiary items.
Guides for this step
Ask your adviser. Want an unbiased read on how much term and disability coverage you actually need? Avidity Capital does not sell insurance and receives no commission or referral fee on any policy, so the answer is only about your family.
Next step
See your own numbers first. The free reality-check needs no account and no card.
This page is education, not individualized investment, tax, legal or insurance advice. It names no products, funds or allocations and carries no client stories. Where a document or a policy is needed, an estate attorney or a licensed insurance agent is the person who prepares it. Avidity Capital Inc. drafts no legal documents and receives no commission or referral fee from insurance, estate attorneys, mortgage lenders or real estate agents. Its compensation is the member's subscription and, for members who choose it, an advisory fee for managing assets; see Form CRS and Form ADV Part 2A. Avidity Capital Inc. is a registered investment adviser.