Protect the ones you love with a life insurance policy | finder.com

Protect the ones you love

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Nothing can fully protect your family and loved ones from the unexpected. But life insurance is among the best ways to help the people you love get back on their feet more quickly when you’re no longer able to provide for them. A life insurance policy can present your family with the financial support necessary to settle your debts, pay for funeral arrangements or care, execute any requests and even set up a future inheritance. Optional riders can provide additional peace of mind, allowing you to enhance your policy to cover specific anticipated needs. That way, your loved ones can more easily focus on healing and life without you.

Consider these life insurance companies

Name Product Issue Ages Minimum Coverage Maximum Coverage
Bestow
Bestow
21 - 54 years old
$50,000
$1,000,000
Affordable 2-, 10- and 20-year term life insurance polices. Instant quotes and no medical exams.
LadderLife™ Life Insurance
LadderLife™ Life Insurance
20 - 60 years old
$100,000
$8,000,000
Term life insurance with no policy fees and the freedom to cancel anytime. Simple application process that can get you approved for coverage instantly.
18 - 85 years old
$50,000
$10,000,000
Compare quotes from 16 life insurance companies side by side.
18 - 80 years old
$50,000
$25,000,000
Get a quote within minutes from more than a dozen insurers.
18 - 64 years old
$100,000
$3,000,000
Customized term life insurance policies up to $3 million, no medical exam required.

Compare up to 4 providers

Companies we’ve reviewed

AIGBanner LifeBrighthouse FinancialGlobe LifeHaven LifeHealth IQJohn HancockLincoln FinancialSBLI
and more!

Life insurance

When deciding how to narrow down your life insurance needs, start by choosing from its two main types: term life and whole life. Term life covers you for a specified period of five to 30 years or more, depending on the provider. After your coverage expires, you can typically renew or convert your policy to another term. Whole life insurance is a type of permanent policy, providing lifelong coverage and often a cash value component and dividends supported by an investment account.

Recent life insurance articles

When is life insurance paid out?

In most cases, your insurer pays your life insurance policy in a lump sum to your beneficiaries after you die. A beneficiary or representative of your estate starts the claims process with your insurer after your death, submitting required forms along with a copy of the death certificate. Most life insurance providers pay out claims within 60 days, with most states allowing your insurer up to 30 days to investigate your claim, if necessary. Insurers may delay payouts if the policyholder’s death is ruled a homicide or suicide. Also, deaths that happen in the first two years after signing up for life insurance coverage typically are subject to something called the two-year contestability clause. This clause allows your insurer the right to more thoroughly investigate your claim to confirm you didn’t provide false or fraudulent information to get a life insurance policy.

Can I receive my life insurance payout before I die?

You might be able to, but it depends on whether you customized your policy at signup with an accelerated benefit rider. These riders allow you to receive a percentage of your policy’s payout if you unexpectedly fall ill or suffer a disability. Depending on your policy’s terms, you can receive your accelerated benefit in periodic installments or as a lump sum to cover the costs of a critical or chronic illness, including long-term care.

What can a life insurance payout be used for?

Living expenses image

Everyday living expenses

Mortgage repayments image

Mortgage repayments

03-debt

Other outstanding debts

Education expenses image

Education expenses


How do I compare life insurance policies?

To find a comprehensive life insurance policy at the best rates, look into how coverage amounts affect your premiums, the flexibility of your policy options and additional riders or features specific to the providers you’re interested in.

To simplify the process of comparing different policies, ask yourself:

    Life insurance policy options

    While term and permanent life insurance are the basics, you’ll find variations that allow for flexibility in how much you pay in premiums, how you can accumulate cash value, whether you can borrow against your policy and more. Knowing what these common variations provide can help you customize a policy that meets you and your family’s anticipated needs.

    Term life Whole life
    Length of term 1 to 30 years Life
    Cost of premium Level premiums Level premiums
    Guaranteed death benefit checkmark checkmark
    Guaranteed cash value checkmark
    How your money appreciates or depreciates N/A Set rate of interest
    What you should know You can’t lose coverage, and you receive no premium refund at the end of the term Not as flexible as other life insurance options

    How much coverage should I get?

    Given the general unpredictability of life, there’s no one universal answer for how much coverage you should buy. Experts will tell you to start with a multiple of your annual income — up to 10 times your salary. Generally, you want to determine an amount that will cover immediate and ongoing costs after you die, so that your family and other dependents can support their current way of life.

    How much life insurance do you need?

    Answer three questions to see the coverage we recommend.

    1) How much debt do you owe?
    Include mortgages, credit cards, car loans, student loans and other debt.

    $

    2) How much do your loved ones need each month?
    Start with how much you take home monthly, adding rent, food and necessities.

    $

    3) How many months will your loved ones need the income?
    Indicate how long you think your loved ones need before they can sustain themselves in your absence

    months

    Your recommended coverage:

    $50,000

    Typically you'll want to add another $15,000-$20,000 for final expenses such as medical costs and funeral expenses.

    4 ways to work out how much coverage you need

    When determining how much coverage is enough to protect your family, consider your debts, living expenses and lifestyle. Also plan for how your loved ones will pay for your funeral, burial and related expenses.

    1. What types of debt will you leave behind?
    Think about how much of your salary goes to pay down debt and how much you pay monthly or annually toward:
    • Outstanding mortgage payments.
    • Rented properties.
    • Personal debt like personal loans, car loans or credit card balances.

    2. How much do you already have for your family to fall back on? Think about the number of years you might need to cover your family’s living expenses and whether savings or assets can offset those costs after your death, including:

    • Accumulated savings.
    • Assets that your family can sell.
    • Investments like property or stock.
    • Employer-sponsored retirement plans or a 401(k).
    3. What are your family’s ongoing living expenses?
    Factor into your life insurance coverage everyday and even irregular expenses, like:
    • Transportation costs, including car maintenance and gas.
    • Property and income taxes.
    • Food, clothing and utilities.
    • Future education and childcare costs.
    • Car, health and homeowners insurance.
    • Entertainment and vacations.

    4. How long will your family need coverage? At some point, your family will be able to rely on Social Security benefits and other investments. But until then, think about:

    • Your age.
    • The ages of your partner and children.
    • The earning capacity of your partner today and in the future.
    • Anticipated funeral expenses.
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    What affects my life insurance premiums?

    To calculate your policy’s premiums, life insurance providers engage a complicated review of your age, health and lifestyle called underwriting. They often run these details through proprietary algorithms and analytical tools to determine the level of risk in taking you on as a policyholder.

    How a life insurance provider rates you within each category varies, but most consider:

    Should I buy insurance through a broker or directly from an insurer?

    You have options when shopping for a life insurance policy. Today, you’ll find brokers that work with a range of companies to help you find the best prices in their network on the coverage you need, but they may not offer the personalized service you’ll find with a direct agent.

    Both broker and agents work on behalf of providers to sell you a life insurance policy. It all comes down weighing each against what you’re looking for.

    Buying life insurance from a broker

    • Not limited to one provider, offering access to a wide range of products for potentially greater choice.
    • Can flex their knowledge of the market to help you find coverage to suit your circumstances.
    • Can help you assess your situation to determine the type and amount of coverage you need.
    • Can offer overall advice regarding life insurance and annuities.
    • Depending on their expertise, may offer higher coverage levels and stronger features outside of your typical policy.

    Buying direct from an insurance provider

    • Limited to one provider’s products, though with expertise to talk about them in detail.
    • May allow you to fully sign up online or by phone, with immediate conditional approval.
    • Online providers may offer faster underwriting and turnaround.
    • Direct products are beginning more — with some offering coverage amounts of up to $15 million.

    I’ve already got life insurance in my retirement plan. Is it enough?

    Many retirement plans provide members with a default level of coverage that you can increased, decreased or cancel altogether. If your employer matches contributions through a 401(k), your plan most likely includes default coverage.

    To know whether your 401(k)’s coverage is sufficient for your situation, consider the benefits and drawbacks of investing through your retirement plan.

    Benefits of investing through your retirement plan

    • Generally more affordable, because coverage is purchased in bulk.
    • Premium payments may be tax-deductible if paid with pretax dollars.
    • Self-employed workers under the age of 75 may be eligible to claim a tax deduction for personal contributions.
    • In some cases, employees can arrange for an employer to make contributions directly to their 401(k) for an amount that includes life or disability premiums.
    • Payments are automatically withdrawn from your 401(k), and not your after-tax income.
    • May not require lengthy medical or health exams.

    Drawbacks of investing through your retirement plan

    • The types of coverage available to you may be limited.
    • Nondependents may pay taxes on benefits.
    • Benefits payments can be complicated and take more time, because the benefit is paid to a trustee, who then distributes funds.
    • Coverage may not be as comprehensive or flexible as a policy.
    • Coverage expires around age 70, whereas most policies outside of a retirement plan can provide coverage until age 90 or 100.
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    Am I eligible for coverage if …

    • I am a non-US resident? Yes. A number of insurers are willing to provide life insurance to nonresidents, especially if you’re in the US for work or family. You must apply for the policy in the US and be willing to take a medical exam.
    • I am over 70? Yes. Most insurers provide life insurance to applicants up to age 75, and a few offer coverage for applicants up to age 80 or even 90. If you’re eligible, the insurer may reduce the level of coverage you’re able to receive.
    • I have a pre-existing condition? It depends on the nature of your condition and any treatment you’re receiving to maintain it. Insurers either exclude the condition from coverage, request more details about your condition or automatically accept it. Eligibility and requirements differ among providers, so you might want to speak directly with an agent about products that meet your needs.
    • I work in a high-risk job? Yes. But it’s likely you’ll pay a higher premium for coverage than an office worker will. If you’re in a high-risk industry, talk with an insurance expert about your chances of finding an insurer willing to offer competitive coverage for your occupation.
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    How to get quality protection that won’t break the bank

    When it comes to life insurance, you don’t want to overpay. But you also want a policy that leaves your family underinsured when they need it most. Here’s how to make sure you’re getting adequate coverage within your budget.

    • Buy young to lock in a competitive rate. The best time for an affordable policy is nearly always when you’re young and in good health. Otherwise, a more complicated medical history and older age can spell high rates.
    • Calculate how much coverage you actually need. Take the time to assess what you’d need to cover in the event of death or serious injury, and think about how that figure could change as you and your family grow older.
    • Learn what coverage you already have. You may already have some life insurance as part of an employer-sponsored retirement plan or 401(k). Find out what you stand to receive in a claim and whether extra coverage is necessary.
    • Take the time to shop around. Compare quotes from a range of insurers for a better chance a finding something tailored to your needs and budget.
    • Keep an eye out for special offers. With so much competition among insurers, you might be able to take advantage of special offers to save on your coverage. Discounts could include free coverage for the first year, access to health rewards programs and lower premiums.

    Can life insurance fit into my budget?

    You may find it surprising how little a life insurance policy can cost monthly when compared with other expenses. Budgeting for life insurance is often easier than some of the other expenses you might be shelling out monthly:

    Monthly expenses monthly Cost
    Term life insurance $30
    Dining out $200
    Health insurance $300
    Cell phone bill $100
    Car insurance $120
    Car payment $250
    Alcohol $50
    Gas $80
    Internet $80
    Pet care $40
    Student loans $300
    Credit card bill $100
    Clothes shopping $60

    How do annuities work?

    An annuity is long-term investment tool designed to pay out your death benefit as regular income to you or your beneficiary, rather than as a lump sum. Life insurance annuities earn interest at either fixed or variable with either immediate or deferred disbursal.

    Fixed annuities earn interest a rate that’s fixed at the time you purchase your policy. While a variable annuity earns interest at a rate that depends on the market, which makes it more like an investment that increases or decreases over time. Your money is distributed into a subaccount that’s managed by a pool of investors, and what you’re paid depends on how well your investment does.

    When it comes to how quickly you’ll get paid, you can either set up an immediate annuity that pays right away or a deferred annuity that disperses cash at a later date that you agree on.

    Keep in mind that your annuity is valid only as long as your insurer is in business. When you’re looking for a policy, shop with highly rated companies.

    Still need help? Get answers to common questions

    Do I even need life insurance?

    How can I get a life insurance quote?

    How do I apply for coverage?

    What won’t my life insurance policy pay for?

    How do I manage my life insurance policy?

    How do I make a claim?

    What brands are among the best in life insurance?

    Company BBB rating A.M. Best rating JD Power rating
    AIG A+ A 718
    AXA Equitable A+ A+ 752
    Banner Life A+ A+
    Brighthouse A+ A+
    Fidelity Life A+ A-
    Guardian Life A+ A++ 760
    Haven Life A+ A++
    Health IQ A A++
    John Hancock A+ A+ 739
    Lincoln Financial A+ A+ 744
    Mass Mutual A+ A++ 780
    Metlife B- A+ 779
    Mutual of Omaha A+ A+
    Nationwide A+ A+ 806
    New York Life B- A++ 828
    Northwestern Mutual A+ A++ 799
    Pacific Life A+ A+
    Primerica A+ A+ 717
    Principal Financial A+ A++ 774
    Protective A+ A+ 742
    Prudential A A+ 770
    SBLI A+ A+
    State Farm B A++ 828
    Transamerica A+ A+ 719
    USAA A+ A++

    Picture: Shutterstock

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