Benefits of life insurance

Not sure if life insurance is worth the investment? Here are 9 reasons to take out a policy.

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As we age and our family, health and finances change, our need for life insurance changes. Life insurance is there as a financial safety net if you die unexpectedly. The right policy can cover debt like credit cards, mortgage and education, and it can take care of others who financially depend on you.

When thinking about the kind of coverage you might need, consider your debts and assets, lifestyle and dependents.

9 benefits to buying life insurance today:

  1. You’ll have ultimate peace of mind that when you pass your family and loved ones will have a financial safety net.
  2. Life insurance will pay a lump-sum benefit to help with financial gaps left behind.
  3. Payouts are generally tax free.
  4. Some companies offer multi-policy discounts for taking out a joint policy with your spouse.
  5. Coverage can generally be bundled with other types of life insurance.
  6. Some brands let you increase or decrease the benefit of the policy in the future.
  7. There are types of life insurance that have a cash value. A portion of the paid premium is set aside and either accumulates interest or is invested in the market. You can borrow from that cash value, or keep it as an end-of-life payout.
  8. Most policies provide an advance benefit, without a waiting period, to help cover immediate costs following death.
  9. As you get older and become more of a risk to the insurer, you may not qualify for a life insurance policy or will pay more.

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Benefits of term life insurance

Term life insurance can help ease any financial burdens by paying a lump sum to your beneficiaries when you pass. A payout from term life can ease the financial stress of your loved ones and used to pay off a mortgage, education expenses, or unpaid debt.

Other benefits include:

  • The ability to lock in low rates while you’re young.
  • It’s the most affordable type of life insurance.
  • The policy terms are straightforward.
  • If you outlive your term you no longer have to pay the premiums.

Read our term life insurance guide

Benefits of whole life insurance

Whole life insurance is as much an investment vehicle as it is life insurance. Eventually, the investment component of your policy could build enough cash-value to pay your premiums, secure a loan, or increase your death benefit.

Other benefits include:

  • Lifelong coverage.
  • A guaranteed death benefit.
  • Level premiums.

Read our whole life insurance guide

Benefits of universal life insurance

Universal life insurance is more flexible than it’s permanent counterpart, whole life insurance. With Universal life insurance, in addition to building cash-value, you can adjust the amount you pay for premiums and increase or decrease the death benefit.

Other benefits include:

  • The option to choose when you pay premiums and how much.
  • The ability to take a loan out on your policy.

Read our universal life insurance guide

Compare life insurance companies

Name Product Issue Ages Coverage Range Medical Exam Required State Availability
LadderLife™ Life Insurance
20 - 60 years old
$100,000 to $8,000,000
Not available in New York
Term life insurance with no policy fees and the freedom to cancel anytime. Simple application process that can get you approved for coverage instantly.
21 - 54 years old
$50,000 to $1,000,000
Not available in New York
Affordable 2-, 10- and 20-year term life insurance policies. Instant quotes and no medical exams.
18 - 80 years old
$50,000 to $25,000,000
Depends on provider and policy
All 50 states and D.C.
Get a quote within minutes from more than a dozen insurers.
18 - 100 years old
$50,000 to $3,000,000
This life insurance broker combines technology and the human touch to match you with a policy tailored to your needs.
20 - 85 years old
$100,000 to $2,000,000
Depends on policy.
Products and product features may not be available in all states.
This well-established life insurance provider could offer you $250,000 worth of coverage for as low as $14 per month.

Compare up to 4 providers

Is life insurance for me?

Anyone can benefit from having life insurance, but it’s especially helpful if:

  • You have kids. If you’re caring for kids, consider the cost of getting them through the school years, and possibly through college. Your life insurance payout can cover living expenses, tuition and all the other expenses that comes with growing up.
  • You have debts. If you have debt, it won’t go away when you die. Your family will be responsible for any debt you leave behind. Consider carrying life insurance that covers all your debt to lift that burden from your family.
  • You take care of others. If you’re the breadwinner in your household, loss of your income could be devastating. A large life insurance policy can ensure that your loved ones are taken care of if you die or become disabled.

Below is a sample of the types of insurance best for the different stages in life:

AgeLife eventsFinancial obligationsTypes of insurance to consider
  • Starting full-time work
  • Moving out of parent’s home
  • Starting to accumulate wealth
  • Everyday living expenses
  • Small personal debt
  • Term life
  • Whole life
  • Disability
  • Increase in income
  • Purchase home
  • Increase in short-term debt
  • Marriage
  • Children
  • Short term debts
  • Spouse and children
  • Everyday living expenses
  • Mortgage

  • Term life
  • Whole life
  • Disability
  • Critical illness
  • Increase in earnings
  • Reduction of debts
  • Outstanding mortgage and personal debt
  • Investments
  • Everyday living expenses
  • Retirement fund

  • Term life
  • Whole life
  • Disability
  • Critical illness
  • Maximum earnings
  • Preparing for retirement
  • Less financial commitments as children move out
  • Outstanding mortgage and personal debt
  • Investments
  • Everyday living expenses
  • Retirement fund

  • Term life
  • Whole life
  • Disability
  • Critical illness
55 and older
  • Protecting wealth accumulated
  • Retire from full-time work
  • Finance lifestyle with savings
  • Everyday living expenses
  • Any outstanding debts
  • Medical costs
  • Funeral Costs
  • Term life
  • Whole life
  • Funeral
  • Critical illness

See how little life insurance can cost per week

How can I find affordable insurance?

The cost of life insurance varies from person to person. What you’ll pay depends on factors like your age, health, occupation and even your gender. However, there are some things your can do to lower your cost

  • Don’t buy the first policy offered. Shop around to compare plans by reading reviews and seeing what policies are out there. Once you choose a provider, always read the terms and conditions to make sure you’re getting what you need.
  • Get an idea of how much coverage you actually need. Think about the people who are financially dependent on you and how much money they need to live without you and your income.
  • Quit smoking. Smokers can pay significantly more for life insurance. Not smoking for at least 12 months can lead to lower premiums.
  • Keep yourself fit and healthy. The less risk you pose to the insurance company, the less you’ll have to pay. I
  • Buy a policy while you’re still young. Age is as important to an insurance company as your health and lifestyle. The longer you put off buying life insurance, the more you’ll have to pay.
  • Joint policies: Why not include your partner or spouse on your term life insurance policy? Not only will the both of you be covered, but you’ll also be eligible for discounts on your premiums.

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