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Buying a life insurance policy can be quick and easy. Unsure of where to start? We’ll walk you through the whole process, so you can compare life insurance quotes and choose the right coverage for you and your family.

A life insurance policy is a contract between you and an insurance company. In exchange for regular payments, called premiums, the insurer pays out money after you die. This payment goes to the people you choose as beneficiaries — usually children, a spouse or other family members. It can be an important safety net if anyone depends on you financially. Beneficiaries can use the money to repay debts, replace your income, or provide funds for future expenses like college tuition.

There are two main types of life insurance: term and permanent. Within these two categories there are various types of policies. Understanding which one is right for you can help you build a robust life insurance plan.

Term life insurance works by covering you for a limited period of time, such as 10 or 20 years. You can choose a term length that matches your needs, and if you die within the term, your beneficiaries receive the payout. When your term life insurance expires, you can buy a new policy or reassess your options. Ideally, by the time the term ends, you no longer need life insurance: Your house will be paid down, your kids will be grown and you’ll have some money in the bank.

Cons: It’s only valid for a set period of time, and it doesn’t build cash value.

Pros: Permanent coverage can provide money for your heirs regardless of when you die. This type of insurance can also be useful if you want to spend your retirement savings but still leave money for final expenses, such as funeral costs.

Cons: Permanent policies are more expensive than term life products due to their lifelong coverage and cash value accounts.

To figure out how much life insurance you need, think about your financial obligations. Then, aim to take out a policy to match them. Debt and income replacement calculators can help you decide before you get quotes.

Here are some expenses to consider:

• Outstanding debts, such as a mortgage, personal loan or credit card balance.

• Everyday living expenses, including child care, utility bills, groceries and car insurance.

• Future expenses, like funeral costs and college tuition.

Another way to crunch the numbers is to multiply your annual income by 10, and use that as a rough estimate.

Although you may have some life insurance through your job, it’s generally a good idea to have your own policy in addition to the life insurance provided by your employer. The policy through your workplace likely isn’t enough to meet your family’s financial needs and can end if you leave the job.

It’s cheaper than you might think. The average life insurance rate for a 40-year-old in excellent health can be as little as $27 a month for a 20-year term policy with $500,000 in coverage, according to Quotacy, a life insurance brokerage. Rates can vary among insurers — sometimes significantly. When setting your rate, each life insurance company weighs factors like your health, lifestyle and driving record differently. Some are more lenient than others, which is why it’s important to compare quotes from several insurers.

Here are average annual life insurance rates for a $500,000, 20-year term life insurance policy for healthy applicants.

Here are average annual life insurance rates for a $500,000 whole life policy for healthy applicants.

The earlier you apply, the better. No matter which insurer you go with, two of the main factors that affect your life insurance premium are your age and health. So the younger and healthier you are, the better your rate is likely to be.

You can still get life insurance if you have a medical condition, but insurers vary in how they view preexisting conditions. Some policies, such as guaranteed issue and simplified issue life insurance, don’t require an exam. These types of policies are typically called no medical exam life insurance. But, if you’re healthy, saying yes to a medical exam could actually lower your rate. That’s because the insurer has a complete picture of your health.

There are a few ways to buy a life insurance policy:

Directly from the insurer. If you’ve done your own research and know exactly which policy you want, you can often buy directly from the insurer.

Through an agent or broker. Need a little help choosing a policy? That’s where a life insurance agent or broker comes in. An agent or broker can help you navigate your options, find a policy that suits your budget and gather all the documents you need to apply for coverage.

Compare policies online. Most insurance companies support online quotes. This makes it easy to shop around for the best coverage at the right price.

Learn more about some of the top insurers by reading our life insurance reviews.

When you’re assessing life insurance companies, look at these three factors:

Financial strength ratings. These determine an insurer’s ability to pay out claims in the future. You can check out insurers’ financial strength through ratings agencies such as A.M. Best or Standard & Poor’s. NerdWallet recommends avoiding insurers with an A.M. Best rating of B or lower, if possible.

Complaint ratios. Ideally, you want to choose a company with a strong track record for customer service. NerdWallet’s ranking of the best life insurance companies favors companies that have fewer complaints to state regulators.

Policy options. Not all companies sell the same types of policies, and some focus on specific products, such as life insurance policies for children. Narrow your choices by reading life insurance reviews and knowing the type of coverage you want before you begin comparing life insurance quotes.

Collect the information you need before you start the life insurance application process. You’ll likely need to provide details about your current and past health conditions, as well as your family’s health history. The insurer may need your consent to get medical records and ask you to take a life insurance medical exam. Insurers also check other sources, such as MIB Group, which collects data on medical conditions, your driving record and hazardous hobbies.

When you choose life insurance beneficiaries — the people who will receive the payout when you die — be sure you have their Social Security numbers and dates of birth. You may also have to answer questions about criminal convictions and driving violations, such as a suspended driver’s license or DUI, particularly if they happened within the past few years.

With some insurers, you can apply online and get instant life insurance. If approved, your coverage could go into effect the same day.

You might come across these terms when you’re shopping for life insurance. Here’s what they mean.

Beneficiary: The person or people you select to get the life insurance payout when you die.

Carrier: Another name for a life insurance company.

Cash value: Permanent life insurance policies typically have an investment portion that increases in value over time. This is known as the cash value account, and once you’ve accumulated enough cash value, you may be able to borrow against your policy.

Death benefit: The amount of money the insurer will pay out to your beneficiaries, generally tax-free, when you die.

Dividend: Some insurers are mutual companies, which means they’re partly owned by their policyholders. They may pay out a sum of money to some policyholders each year based on the company’s financial performance. These payments are dividends.

Exclusions: The circumstances in which your life insurance policy won’t pay out, such as death from a risky activity like skydiving. Exclusions vary among insurers and are listed in the policy documents.

Face value: The basic death benefit of the policy. For example, if you purchase a $500,000 policy, its face value is $500,000.

Policyholder: The person who owns the life insurance policy.

Premium: The amount of money you’ll pay to keep your life insurance policy active. With most policies, you have the option to pay monthly, quarterly, semiannually or annually.

Underwriting: The process an insurer uses to gather information about you and set your life insurance rate.