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Our editorial team researches, analyzes and fact-checks hard-to-find details for the life insurance companies we review. Read accurate, unbiased reviews that can help you narrow down insurers that meet your needs, lifestyle and budget.
Life insurance is a financial safety-net for your loved ones in the event of your passing. Think of life insurance as a contract between you and your insurance company. You pay a premium to maintain your coverage and when you die, your insurer pays out your policy to your beneficiaries. This payment is known as a death benefit.
Here’s the golden rule. If you have loved ones who depend on you financially, you most likely need life insurance. Your policy can help to provide for them when you’re gone. These people have the greatest need for life insurance:
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.
Your insurer will charge a monthly or annual premium to keep your policy active. Try to make timely payments to avoid a policy lapse.
While rates can vary wildly, the average cost for life insurance is less than $50 a month. For example, a 20-year term life insurance policy worth $500,000 for someone between the ages of 25 and 40, and in good health, would average around $28 a month.
Your rate depends on a range of factors, like your age, gender, health, occupation, lifestyle and whether you’re a smoker. The coverage amount, term length and type of policy you’re applying for come into play, too. Insurers weigh these factors differently, which is why it’s important to compare quotes from multiple companies.
Start by deciding whether you want coverage for a certain period or the rest of your life. Term life covers you for a specified period of typically five to 30 years, with options to convert your policy to another term if you need. Whole life insurance is a type of permanent policy, with lifelong coverage and a cash value component plus dividends.
Easily the most practical and affordable life insurance option, term life insurance offers coverage for a predetermined period of time.
Whole life insurance provides lifelong coverage at a fixed rate, while building in cash value.
Universal life insurance offers both lifelong coverage and an investment component that tracks the major indexes.
This investment focused life insurance policy is for experienced investors looking to grow and use the cash value component of their policy later in life, tax deferred.
Joint life insurance is a single policy, term or whole, that aims to meet the needs of two people, usually married.
This type of insurance provides a necessary income should you become afflicted with a debilitating injury or illness and are unable to work.
Every type of life insurance, explained
| Feature | Term life | Whole life | Universal life | Variable life | Simplified life | Guaranteed issue | Final expense | Group life |
|---|---|---|---|---|---|---|---|---|
| Coverage for a set period | ||||||||
| Lifelong coverage | ||||||||
| Guaranteed death benefit | ||||||||
| Requires health questionnaire | ||||||||
| Requires medical exam | ||||||||
| Fixed premiums | ||||||||
| Flexible premiums | ||||||||
| Builds cash value | ||||||||
| Offers tax free loans |
The death benefit is paid out when you die. 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. It’s typically paid out in a lump sum — but you can instruct your insurer to pay the death benefit in installments or annuities.
Your beneficiaries can then use the money however they wish. These are some of the most common ways people spend the cash:
Maybe. There are two ways you can tap into your policy while you’re still alive:
Some insurers offer living benefits riders, which pay out your policy early in certain circumstances. These include:
More on this in a minute, but these policies accumulate cash value over time. Once you’ve built up enough cash value, you can begin to borrow against your policy.
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:
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.
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.
Think about how much of your salary goes to pay down debt and how much you pay monthly or annually toward:
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:
Factor into your life insurance coverage everyday and even irregular expenses, like:
At some point, your family will be able to rely on Social Security benefits and other investments. But until then, think about:
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:
You have options when shopping for a life insurance policy. 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
Buying direct from an insurance provider
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