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More on Life Insurance
More on Life Insurance
Life Insurance Basics
Types of Life Insurance
Types of Life Insurance - Overview
Term Life Insurance
Whole Life Insurance
Term vs. Whole Life Insurance
No Medical Exam Life Insurance
Coverage and Cost
How Much Life Insurance Do I Need?
How Long Should My Coverage Last?
How Much Does Life Insurance Cost?
Life Insurance Calculator
Life Insurance Reviews
Best Life Insurance Companies
Life Insurance For Seniors
Life Insurance for Family
Life Insurance for Chronic Illness
Life Insurance for Diabetics
Life Insurance for People with Depression
Life Insurance for Marijuana Users
Life Insurance for Smokers
Life Insurance Rates for Vapers
Life Insurance Company Reviews & Comparisons
Buying Life Insurance
Life Insurance Ownership
Life insurance provides a tax-free lump sum of money, called the death benefit, to a designated beneficiary after your death. You choose the type of policy you need, number of years you want it to last, and coverage amount, and make premium payments to the insurance company. If you die while your life insurance policy is active, your beneficiaries can file a claim and the death benefit will be paid out to them.
Life insurance coverage offers affordable financial protection — and invaluable peace of mind — to people whose friends or family members rely on them. The death benefit can be used to pay for expenses like a mortgage, utility and grocery bills, children's college costs, final funeral arrangements, long-term care, and more.
Learning about life insurance can be overwhelming – but Policygenius is here to help. We’ll help you figure out what to keep in mind when considering life insurance and walk you through the process of shopping for a policy to make sure you get life insurance right.
When shopping for life insurance, most people decide between two types of policies: term life insurance and whole life insurance.
Term life insurance is the most common type; it expires after a set period of time (the term), providing protection when you need it and ending when you’ve paid off your major financial obligations like a mortgage, college tuition, and raising kids.
Term life is popular because it’s straightforward and much cheaper than other types.
Whole life insurance is a type of permanent life insurance. That means it doesn’t expire; it also has a cash value component, which acts similarly to an investment account that you can borrow from.
However, this component comes at a cost, and whole life insurance is substantially more expensive than term life. This can be helpful for some complex financial situations, but most people won’t benefit from the extra cost.
Other types of permanent life insurance include:
The type of life insurance is a major factor in determining how much your policy costs, how long it lasts, and which company you should go with, so it’s important to understand which is right for you and your family.
Everyone’s life insurance needs are different, so it’s important to find the policy that suits your unique situation. However, term life insurance is the best coverage option for most people. It’s easy to use and offers the most affordable coverage compared to other types of life insurance.
Sometimes, final expense life insurance or whole life insurance are better options even though they are a lot costlier. Final expense life insurance can be a viable coverage option for individuals who don’t qualify for traditional term life insurance or need a smaller policy to pay for end of life costs, like a funeral.
Most people shouldn’t tie their investments to their life insurance policy, but if you’ve maxed out investments elsewhere or have a long-term dependent, whole life insurance may be suited towards your needs.
Speaking to an independent agent about your financial circumstances and life insurance needs is the best way to determine the right policy for your situation.
A major part of choosing which type of life insurance you need is the monthly premium rate you’ll pay.
So how much does life insurance cost? That depends on a number of factors, including:
While life insurance premiums – the amount you pay to keep your policy active – vary from person to person, in general, whole life insurance is more expensive than term life, by an average of 10-15x.
Older shoppers, less-healthy applicants, and men also tend to pay more.
A 2020 report by the U.S. Federal Reserve Board showed that nearly 40% of adults would have trouble paying a $400 emergency expense, and 12% "would be unable to pay the expense by any means."
Does anyone depend on your income? If the answer is yes, then you probably need life insurance.
Experts recommend getting life insurance coverage that is 10-15 times your income, but the exact amount of life insurance you need depends on your financial circumstance.
The optimal amount of coverage accounts for all of your financial obligations and includes a cushion, with a policy term length that lasts as long as those obligations and any outstanding debts.
Policygenius data from October 2020 shows that people in their 30s, 40s, and 50s most commonly purchased $250,000 to $1 million in coverage.
You don’t have to figure it all out yourself. Our free life insurance coverage calculator does the work for you:
Now that you’ve considered everything that goes into choosing a life insurance policy, it’s time to actually start shopping.
The life insurance application process usually takes four to eight weeks from start to finish, but before you begin, you should compare and contrast quotes across multiple insurers so that you don’t end up paying more than you have to.
You can complete the application process in just seven steps.
Here’s how it works:
Want to know a secret? For most people, the cheapest life insurance policy that fits their coverage needs is the best one.
But some insurers differ in how they assess people of different ages or with different health conditions. That’s why it’s important to compare – if a policy is too expensive at one company, a comparable policy may be affordable at a different company.
You can also look at a company’s customer satisfaction and financial strength ratings to help make your decision.
So which life insurance company is the right one for you?
Don’t worry – we’ve done the heavy lifting. Learn about what types of policies each company offers, how much they cost, and the company’s financial strength in our reviews of life insurance carriers.
The market, right here. At Policygenius, you can compare all of the nation's top-rated life insurance companies side-by-side in one place. Shoppers can save up to 40% by making sure they're choosing the right company at the right cost.
The right advice. Not sure where to start? Policygenius provides unbiased reviews and ratings, along with expert advice from licensed agents who don't work on commission.
Right in your corner. We always fight for you - not the insurance company. Our experts will always advocate on your behalf to find the right fit at the lowest price, and we'll be with you through every step of the process.
When you buy a policy through us, the insurance company pays the commission to Policygenius, not to the individual insurance agent who helped you. When your agent earns a salary instead of a commission, you can trust they're selling you only what you really need.
Because we work with all the biggest life insurance companies, we're not tied to any one carrier. Our goal is to match each person with the policy that's right for them - no matter who it's with. That means we're able to put shoppers first, every time.
Policygenius’ licensed experts can help you from start to finish so you can feel confident and comfortable with your life insurance decisions.
The reviews are in. See what our current customers are saying about how we make buying life insurance easy.
Term life insurance is the cheapest option for most people, so that’s a good starting point when looking for the most affordable policy.
Regardless of the type you buy, compare companies to make sure you’re choosing the one that’s best for your particular health details and financial situation.
Life insurance provides peace of mind for you and your family. Term life is an affordable form of financial protection, and it costs as little as $20-$25 a month for some people.
The death benefit is usually tax-free, so your family gets the entire amount. Life insurance can be purchased online, and the entire benefit is available as soon as the policy is active - there’s no waiting period.
Policygenius is proud to provide industry-best life insurance quotes. But sometimes information uncovered during the application process means your policy will cost more than expected.
When this happens, we’ll shop your application around to our partner insurers and negotiate to get you the best possible price – guaranteed.
If your policy isn't active when you die - you outlived the term, let it lapse, or canceled it - you're no longer insured and the company won't pay the death benefit.
Additionally, during the first two years of the policy the company can refuse to pay in cases of suicide, and can also investigate any death for evidence of fraud; if found, they may pay out only a portion of the benefit, or none at all.
Group coverage is a popular workplace perk but often falls short in two ways: It limits your coverage amount, and it isn’t transferable if you switch jobs. A private insurance policy allows you to customize your coverage and stay protected for as long as you need it.
Already have group life insurance? Let our experts help you find the right supplemental policy to complete your coverage.
Nupur Gambhir is a life insurance editor at Policygenius in New York City. She has researched and written extensively about life insurance since 2019, with specialties in life insurance companies, policy types, and end-of-life planning. Her writing on insurance and finance has appeared on MSN, The Financial Gym, and end-of-life planning service Cake. Previously, she worked in marketing and business development for travel and tech.
Nupur has a B.A. in Economics from Ohio State University.