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This article was reviewed by Andrew Flueckiger, a member of the Finder Editorial Review Board and certified insurance counselor and licensed insurance agent in five states.
Finder’s life insurance experts have spent over 500 hours analyzing quotes and policies from 100+ companies, fact-checking their approval process, age cutoffs, medical exam requirements and more. We highlight the fine print as well as each company’s strengths and downsides.
Read accurate, unbiased reviews that help you narrow down insurers to meet your lifestyle and budget.
The average cost for life insurance is less than $50 a month. For example, a $500,000, 20-year term life policy for a healthy person between ages 25 and 40 costs around $28 a month.
However, your rate depends on many factors like your age, gender, health, job or smoking habits. The coverage amount, term length and the type of policy come into play too.
Insurers weigh factors differently, which is why it’s important to compare quotes from multiple companies.
Choosing the right amount of coverage, known as your policy’s face value, comes down to how much you can afford. When you’re doing the math, factor in:
To find the best deal on a comprehensive life insurance policy, look at coverage amounts compared to your premiums and other features that attract you to an insurer, including:
If you see insurance terminology that you don’t know, use our life insurance definitions to make sure you understand every detail about your policy.
Life insurance works by letting you pay a premium to get financial protection in case you die. When you die, your insurer pays a death benefit to anyone you named on your policy, called beneficiaries.
Your life insurance policy is a financial safety net for your loved ones, helping them pay the bills and letting them focus on healing after you die.
If you have loved ones who depend on you financially, you most likely need life insurance. Your policy can help provide for their needs when you’re gone.
Those with the greatest need for life insurance are:
Get quotes from a range of insurers to find a policy that suits your budget and needs. Once you’ve settled on a policy, choose your coverage amount and select riders.
Submit your personal and contact details, as well as information about your income and employment. You might have to fill out a health questionnaire or take a medical exam, too.
Having pre-existing conditions like heart disease complicates getting life insurance, but you can find a policy. Boost your chance of getting approved:
The death benefit is paid out when you die, typically as a lump sum — but you can specify paying the death benefit in installments or annuities. Your beneficiaries can use the money however they wish, including:
No, the death benefit isn’t taxable income, unless your estate is worth more than the IRS threshold. If so, your estate will be subject to federal estate taxes. The life insurance payout is considered part of your estate.
You can tap into your policy while you’re alive in several ways, including:
Some insurers offer living benefits riders that offer early payments in certain cases. Types of living benefits:
These policies accumulate cash value over time. Once you’ve built up enough cash value, you can begin to borrow against your policy.
Life insurance plans are lumped into several main types of life insurance: term, permanent, no-medical exam and group life policies.
Features like whether a policy is permanent or temporary or has fixed monthly premiums could help you decide which policy type is right for you.
Feature | Term | Whole | Universal | Variable |
---|---|---|---|---|
Lifelong coverage | ![]() | ![]() | ![]() | ![]() |
Requires medical exam | ![]() | ![]() | ![]() | ![]() |
Fixed premiums | ![]() | ![]() | ![]() | ![]() |
Builds cash value | ![]() | ![]() | ![]() | ![]() |
Offers tax-free loans | ![]() | ![]() | ![]() | ![]() |
Most insurers allow you to dress up your policy with riders, including these popular ones:
Both brokers and agents work on behalf of insurers to sell you a life insurance policy, but they have a few differences:
Buying from a broker
Buying from an insurance company
That way your loved ones won’t get saddled with your debt or end-of-life expenses unexpectedly.
The insurer will review the claim and pay the death benefit once approved.
Katia Iervasi is a staff writer who hails from Australia and now calls New York home. Her writing and analysis has been featured on sites like Forbes, Best Company and Financial Advisor around the world. Armed with a BA in Communication and a journalistic eye for detail, she navigates insurance and finance topics for Finder, so you can splash your cash smartly (and be a pro when the subject pops up at dinner parties).
Save money by targeting your coverage to your largest debts.
A permanent life insurance policy’s cash value can be used as a retirement income supplement, though using it reduces your policy’s death benefit.
There are two main features of permanent life insurance, but using one can affect the other.
These protections work together to help you make it through your medical leave.
Guaranteed life insurance often has lifelong coverage just like whole life insurance, but comes with a high price tag since there is no medical exam required.
Two permanent life insurance policies that provide lifelong coverage, though variable life is a riskier investment option than whole life.
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These coverage options serve different functions but have one benefit in common.
Learn the common health reasons that lead to denials and how to get life insurance anyway.
Mortgage life insurance may be a good fit for people with serious health conditions, otherwise term life insurance offers more value and flexibility.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
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