Get the Life Insurance that's right for you.

What Is Life Insurance?

Life insurance is a contract that provides financial protection for a policyholder's life for a set amount. A policyholder must pay a monthly or annual premium in exchange for coverage.

When the policyholder dies, their named beneficiary is entitled to the contract's value, known as a death benefit.

A death benefit is a tax-free payment that your family or loved ones can use to cover expenses such as a funeral, mortgage payments, college funds, or to supplement the policyholder's lost income.

What Are the Different Types of Life Insurance?

There are many kinds of life insurance policies available.  Each is designed to meet your financial objectives and protect your loved ones after your death. Term life and permanent life insurance are the two most common types.

Term Life Insurance

The more popular option is term life insurance, which provides simple and affordable coverage for a set period.

The advantage of term life insurance is that you can tailor your coverage length, or "term" to meet your specific financial needs. Term life insurance expires when the term has ended or when you fail to pay your premiums.

You can, for example, match term life insurance to the length of time it takes to pay off a financial obligation, such as a mortgage.

If you die while your policy is still in effect, your beneficiaries can use the death benefit to pay off your loan. 

Here are some examples of term life insurance policies:

• Decreasing term life insurance is a renewable term life insurance policy with decreasing coverage over the policy's life.

• Convertible term life insurance allows policyholders to convert a term policy to permanent life insurance.

• Renewable term life insurance is based on a quote for the year the policy is purchased. Premiums typically rise annually and are lowest at the start of the policy.

Permanent Life Insurance

Permanent life insurance is a little more complicated than term life, but the main difference is that it lasts your entire life and only expires if the insured fails to pay their premiums.

While permanent life insurance is significantly more expensive than term life insurance, many policies include investment tools, and some allow you to borrow money against your plan. 

• Whole life insurance is a type of permanent life insurance that builds up cash value over time.

• Cash value life insurance allows the policyholder to borrow against the policy as a loan or source of cash to pay premiums.

• Universal life insurance is a type of permanent life insurance with an interest-bearing cash value component. Universal life insurance has flexible premiums that can be adjusted over time and is available with a fixed or increasing death benefit.

• Indexed Universal Life Insurance is a type of universal life insurance in which the policyholder earns a fixed or equity-indexed rate of return on the cash value component.

• Variable universal life insurance allows the policyholder to invest the policy's cash value in a separate account. It also has flexible premiums and can have a fixed or increasing death benefit. 

What Are Life Insurance Riders?

Life insurance riders are options you can use to tailor an insurance plan to your specific coverage requirements.

Most companies offer some common riders that are widely available, but the companies will apply different criteria on what they offer and how much their riders cost.

Common insurance riders include accidental death benefits, accelerated death benefits, and guaranteed insurability riders.

How Much Does Life Insurance Cost?

The cost of life insurance is determined by the type of policy, the policy value, and various factors such as age, health, and gender.

Insurers will ask about your medical history, medications, tobacco use, family history, and profession. The majority of plans require a medical exam as well as a health questionnaire.

A 20-year, $500,000 term life insurance policy will probably cost most healthy applicants between $25 and $30 per month.

Rates for cash value life insurance plans, such as whole or universal policies, are typically much higher. Various factors are considered, but it’s generally best to buy these when you're younger and healthier because premiums often rise with age. 

At PolicyScout, we can help you find quotes from top-rated insurance companies. Our licensed agents are here to help you make an informed decision for your family.

What Factors Affect Your Life Insurance Premiums?

The price you pay for life insurance will depend on your:

• Age - younger people get less expensive rates.

• Gender - women tend to get better rates than men.

• Smoking - smoking and tobacco use will significantly impact your premiums.

• Health - poor health or chronic conditions can affect your premiums or deny you coverage altogether.

• Lifestyle - some companies want to know if you engage in risky activities, like skydiving.

• Driving record - good drivers can often get better rates for their responsible driving skills.

What Are the Best Life Insurance Companies?

We’ve scouted the best insurance companies to save you time and money by providing information to help you make an informed decision.

We spend a lot of time researching multiple life insurance companies and we’ve compiled reports on our findings to help you save time and money. 

Northwestern Mutual Life, State Farm, and Pacific Life are some of our top-rated life insurance companies, but we encourage everyone to shop around to find the best policy for their family's needs. 

Read our review of the top Life Insurance Companies of 2022 ->

How Much Life Insurance Should I Buy?

Here are some tips to consider when choosing on a life insurance plan. 

1. Determine the amount of coverage you require

Add up all your financial obligations, such as mortgage payments, income replacement, debts, funeral costs, and college funds. As a general rule, most life insurance companies recommend a policy worth ten times your current annual income. 

Learn more about calculating how much coverage you need here ->

2. Prepare for the application 

Determine whether you need to take a medical exam to be eligible for coverage. Generally, the more coverage you want, the more likely you will be required to take a medical exam.

If you must take an exam, answer all the questions truthfully, get plenty of rest, and drink plenty of water in the days leading up to the exam.

Most term life insurance companies do not require a medical exam and will look at your medical history to determine your eligibility.

Learn more about preparing for a life insurance medical exam here ->

3. Shop around and compare your options to find the best plan for you

There is no one-size-fits-all policy, so find a company and plan that align with your financial objectives. Also, take a look at the company's financial ratings. The higher a company's financial rating, the more likely it will pay out on your claim and the less likely to raise premiums. 

Why Do I Need Life Insurance?

Life insurance gives you peace of mind that your spouse, children, family, and loved ones will be financially secure when you die.

Life insurance can help pay off your mortgage and debts, fund your children’s education, or pay for funeral expenses, relieving your family of the financial burden.

Permanent life insurance policies can also assist you in meeting financial goals while you are still alive, such as funding your retirement or college education. 

PolicyScout's experts can help you find the best option for securing your financial future. We have ranked the best life insurance companies, and our agents can assist you in getting a policy today. 

Read our latest review to find the best life insurance providers for 2022 ->