To get insured, you need to choose the life insurance quotes that align with your needs and budget. Remember, life insurance protects your family. But before you decide what plan is the best for you, make sure you understand the nuances of life insurance.
This guide takes you through the various aspects of life insurance, the types available, and more.
What is Life Insurance?
Simply put, life insurance is a contract between an insurance company and a policyholder. The policyholder pays a premium, and the life insurance company pays the selected beneficiaries, usually family members, a specific amount of money upon the policyholder’s death.
Life insurance can also take care of your debts like tuition fees, medical debts, mortgage, and personal loans.
Whole vs. Term Life Insurance Cost Per Month Average Rates
Customer Type | Coverage Amount | Whole Life Cost | 20-Year Term Life | 30-Year Term Life |
30 year old male | $250,000 | $180 | $12 | $19 |
30 year old male | $500,000 | $355 | $19 | $31 |
30 year old male | $1,000,000 | $700 | $31 | $54 |
30 year old female | $250,000 | $160 | $11 | $16 |
30 year old female | $500,000 | $310 | $16 | $26 |
30 year old female | $1,000,000 | $620 | $25 | $44 |
40 year old male | $250,000 | $266 | $17 | $28 |
40 year old male | $500,000 | $530 | $29 | $50 |
40 year old male | $1,000,000 | $1,050 | $49 | $90 |
40 year old female | $250,000 | $229 | $15 | $23 |
40 year old female | $500,000 | $449
|
$24
|
$39
|
40 year old female | $1,000,000 | $899
|
$42
|
$75 |
50 year old male | $250,000 | $415 | $39 | $67 |
50 year old male | $500,000 | $825 | $70 | $125 |
50 year old male | $1,000,000 | $1649 | $133 | $242 |
50 year old female | $250,000
|
$355 | $29 | $49 |
50 year old female | $500,000
|
$709
|
$54
|
$92
|
50 year old female | $1,000,000
|
$1399
|
$99
|
$175
|
Different Types of Policies Offered by Good Life Insurance Companies
There are different types of insurance policy plans. But the main types of life insurance are term life insurance vs whole life insurance (also called permanent life insurance).
Here we go:
Term Life Insurance
Term life insurance covers a limited period, that can be 10, 20, or 30 years, some life insurance companies even offer coverage for up to 35 and 40 years. If the policyholder dies during the stated term, the beneficiaries receive the agreed amount of money for their upkeep and other family expenses. Upon expiry, you can renew it, change it into a permanent policy, or terminate it.
Whole Life Insurance (or Permanent Life Insurance)
Whole life insurance is a general name for life insurance policies that never expire. This type of plan is quite costly. However, it offers extra benefits like cash value. The savings can be loaned against the policy when you need cash.
Within these two broad classes of life insurance policies, there are these subcategories to choose from:
- Universal life insurance
- Variable life insurance
- Variable universal life insurance and others
Universal Life Insurance
Like a whole life insurance policy, universal life insurance has a cash value. The premiums you pay will go towards both that value and the death benefit.
The key with universal life insurance is that policyholders can alter both the premium and death benefit amount within the same policy.
Variable Life Insurance
A variable life insurance cash value is like an investment. The money you pay goes into multiple mutual fund-like accounts that will grow more over time.
However, this carries a risk as you can lose money if the market enters recession. The value of your policy lies in the value of the stock market.
Simplified Issue Life Insurance
Simplified Issue life insurance is a type of plan with a “no exam policy.” Instead of the exam, your risk would be determined through a health questionnaire.
This “no exam policy” mainly benefits healthy individuals looking to purchase a plan quickly. Unfortunately, people in poor health may still be subjected to a medical exam and be denied an insurance plan.
But if you would like to know the average cost of life insurance at your favorite firm, hop on a call right now.
Get all the best quotes from leading providers in a click of a button!
Other Forms of Life Insurance
Group Life Insurance
Group life insurance covers several different people under one contract, usually found in workplaces.
Mortgage Life Insurance
With mortgage life insurance, the company will cover the remaining balance of your mortgage payments if you pass away. Your beneficiaries will not need to pay the mortgage off.
Credit Life Insurance
Credit life insurance covers any loans you had before your death. If you die, this policy will cover the remaining balance of your loan.
Accidental Death and Dismemberment Insurance
Accidental death insurance and dismemberment insurance will pay you or your beneficiaries a certain amount of money in the event you die or are dismembered due to an accident.
Joint Life Insurance
Joint life insurance insures two people, usually spouses, under one policy. There are two distinct types of joint life insurance:
- First-to-die joint life insurance pays out upon the first person’s death. The surviving member is the beneficiary who receives the lump sum amount to finance their lifestyle.
- Second-to-die joint life insurance pays out after both people have died. The money goes to the couple’s beneficiaries. However, the surviving spouse must continue to pay the premium once the first spouse has passed.
Level Term Life Insurance
Level-term life insurance is a type of term life insurance in which the premium and the death benefit do not change throughout the period of the plan.
Direct Life Insurance
This is a life insurance product in which the buyer does not need to deal with an agent but can work directly with the insurance company.
Underwriting and What It Means for Your Life Insurance Policy
Underwriting refers to the life insurance company’s determination of your risk (meaning how risky of a policyholder you are). Your life insurance risk is directly correlated to your health, gender, age, profession, and other relevant factors.
Most life insurance policies won’t change prices for the duration of your term, so underwriting is incredibly important for life insurance companies.
Best Life Insurance Companies & Services
Here are our top recommended life insurance companies:
Fabric: 5/5
Fabric is a fully online term life insurance company that offers fast, easy online term life and accidental death insurance at affordable rates to its shoppers.
You can find $100k to $5m policies with 10, 15, and 20-year terms starting from as little as $6 a month and get covered in less than 10 minutes with no brokers, no agents, no medical exam.
Ethos: 4.5/5
Ethos is a modern, advanced life insurance company offering a broad range of term life insurance policies, from 10 to 30 years in length, at affordable prices and flexible online policies. The firm offers fast and smooth online applications.
Everyday Life Insurance: 4.5/5
Everyday Life Insurance is a reliable life insurance company that distinguishes itself by offering exceptional customer service and great financial stability.
Northwestern Mutual Life Insurance: 4.5/5
Northwestern Mutual is known for its flexibility. They offer five different types of plans, and these plans are either whole life, term, or universal life policies.
At any point, a term life policy can become a whole life policy without you going in for a medical exam.
Prudential Life Insurance: 4/5
Prudential is known for its high coverage limit and its customizability. Though they do NOT offer whole life insurance policies, the firm has three variable policies, namely:
- PruLife Custom Premier II Permanent Variable Universal Life
- VUL Protector Permanent Variable Universal Life
- PruLife SVUL ProtectorSM Permanent Variable Universal Life.
One complaint with Prudential is that you must work with their agent to ensure you fully understand their plans.
State Farm Life Insurance: 4/5
State Farm is another famous company whose premiums are typically higher than average, and they have few term-length options. Notably, they are known for their stability and reliable customer service but aren’t one of the cheapest life insurance providers.
Get all the best quotes from leading providers in a click of a button!
Wrapping Up
While finding the best life insurance, you should understand the available plans, their premiums, duration, and any other crucial factors. Take time to familiarize yourself with the various terms used in insurance.
Also, compare the companies offering life insurance and pick the one you deem right. If you do not have much time to research life insurance, consider talking to an agent.