What is life insurance?
Life insurance is a way you can protect your family and loved ones, even after you pass away. Rather than leaving your family with existing debt, funeral expenses and other everyday costs, they'll receive a tax-free death benefit or payout. This can provide financial security and stability. With a life insurance policy, you're prepared for the worst but can plan for the best.
Do I need life insurance?
Just about everyone can benefit from some level of life insurance protection for their loved ones. You might be just starting out, raising a family, or preparing for your golden years—as long as you have loved ones you want to protect if you pass away, life insurance can help. The key is finding a policy that fits you. Whether you’re looking for a lot of coverage or just the basics, we have a policy for what you need.
Life insurance can help your loved ones:
- Cover the rising cost of funeral expenses
- Replace lost wages or the value of your time (e.g., stay-at-home spouse)
- Pay off debt
- Provide for a college education
- Leave an inheritance
How much coverage do I need?
A good starting place for determining how much coverage you need is to add up any financial responsibilities your loved ones would be left with. That could include the cost of a funeral, childcare, a mortgage, college education, outstanding debts or other everyday expenses. Your coverage amounts should account for things you currently pay for or know you will be paying for in the future.
Without enough coverage, your family might be left with large, unexpected financial burdens. Our coverage calculator can help you land on an estimate to ensure they’re protected.
What types of life insurance are there?
Most life insurance falls in two basic categories: term and permanent. Term lasts for a set period of time, and permanent lasts your entire life.
| Category | Term life | Permanent life |
|---|---|---|
| Cost | As low as $10/mo | Price varies |
| Coverage term | 10-40 years | Your entire life |
| In-person medical exam | Sometimes required | Sometimes required |
| Other benefits that may be available |
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Which life insurance policy is right for me?
Which life policy is right for you depends on what you’re looking for. Our LifeTrek tool can help identify the level of life insurance protection you need, taking into account your finances and unique goals. Just answer a few questions.
Why choose term life insurance?
Term life insurance is perfect for anyone trying to save money today and keep their loved ones protected in the future. Whether you’re single, married with kids, approaching retirement, or anywhere in between, an active term life insurance policy protects whoever might be left with a financial burden. It’s also significantly less expensive than permanent life insurance.
What is permanent life insurance?
Permanent life insurance is a policy that lasts from the time you buy it until the time you pass away—assuming all ongoing payments are made. On top of paying a death benefit to your family, it can also include a separate cash value savings component. Cash value can benefit you while alive by helping you pay your premiums, take out loans on your policy and more.
There are a few different permanent life insurance policy options. Looking for permanent life insurance? Find an agent.
Whole
Whole life insurance gives predictable lifelong protection with the most guarantees, like a fixed premium and death benefit.Universal
Universal life insurance provides flexible protection that can last your lifetime and includes some cash accumulation options.Variable
Variable life insurance offers different investment options for cash value and flexibility in benefits.
What factors shape my life insurance cost?
What you pay for life insurance is affected by a lot of factors. Some of those factors are related to you, others are related to the world around you.
- Age: Generally, the younger you are when you buy your policy, the lower your premium will be.
- Term vs. Permanent: Term policies are significantly less expensive than permanent plans.
- Length of term: Term policies are available in 10- to 40-year term lengths.
- Coverage amount: A policy with a larger death benefit amount will naturally cost more than a similar policy with a smaller benefit amount.
- Health history: Things like your current health, health history and family medical history all shape your price.
- Lifestyle: Smoking or high-risk hobbies often lead to higher premiums.
Life insurance FAQs
It certainly can. The misconception about the price of life insurance is the main reason many people opt out. Consumers think life insurance costs nearly three times the actual price, according to a report by the nonprofit Life Happens. Premiums depend on many factors, including your age and health, so it's advised to look into life insurance now rather than waiting until you’re older.
Employers often offer life insurance policies — and that’s a great start. The problem is this coverage only lasts while you’re employed with the company, which puts you at risk if you change or lose your job. And most people usually need far more than what their employee can offer.
Not married? Kids not in your immediate future? You may think you don’t need life insurance yet, but it may be to your advantage to buy it today. Generally, the younger and healthier you are when you initially purchase life insurance, the less expensive it is, and the easier it is to qualify for it. Each year that you wait to purchase life insurance, your rates will most likely increase. And if you develop any health issues in the future, it may impact your ability to get life insurance regardless of your age.