Does Medicare Cover Nursing Homes?
Medicare doesn't cover long-term nursing home care, but it will pay for shorter stays after some hospital visits. You can also buy... Read More
Compare Life Insurance Plans
Compare life insurance quotes and find the best rates for a policy.
Life insurance can help protect your family financially if anything happens to you, but it’s important to make sure you’re not overpaying for the coverage you need.
How does life insurance work?
Life insurance is a planning tool that provides financial protection for your dependents.
The asset provides a tax-free lump sum of money which is paid to your dependent after your death. Typically, life insurance is bought so that your dependents would be able to sustain payments for bills, college tuition or other after-life expenses.
Key components of life insurance policies are:
- Term: When buying life insurance you would choose how many years your policy will last. This will also depend on the type of life insurance that you purchase — permanent insurance has a term that will last your whole life for example.
- Death benefit: The face value for the life insurance policy. This is the amount of money that would be paid to the beneficiary if you passed away.
- Premiums: The monthly or annual payments that you give to the insurer to keep the life insurance policy in place. If you miss a payment or decide not to pay the life insurance policy would be canceled.
How to calculate your life insurance needs
Every individual has a different financial situation and therefore will require different life insurance needs.
When calculating your needs you should consider what the life insurance will be used for and why you may need life insurance in general.
If you are young and do not have any dependents then buying life insurance may not be a necessary purchase at this point in your life. On the other hand, if you are starting a family in which the financial livelihood of the family relies on your salary, then you may want to consider purchasing some life insurance coverage and calculate your future needs.
When beginning to calculate how much life insurance you need, you should start by adding up your current and future financial obligations. This can include obligations such as:
- Future salaries
- Mortgage balance
- Debts
- College costs
- Funeral costs
After you have figured out your obligations, you can add up your current assets such as savings and college funds. Finally, by subtracting your current assets from the obligations you will arrive at a target amount for how much life insurance you will need. It is important to note that this is a rough estimate for coverage and it may be useful to purchase slightly more life insurance to compensate for unexpected financial situations that your dependents might face.
Types of life insurance
Life insurance companies will typically offer two different types of life insurance: term life insurance and permanent life insurance.
A term policy will last for a set period of time before expiring while permanent plans stay in effect for your entire life. Furthermore, some permanent life insurance policies will have a cash value component that will grow as you make premium payments.
Term life insurance | Permanent life insurance | |
|---|---|---|
| Period of coverage | Specified term, usually one to 30 years | Lifelong |
| Cash value | No | Yes |
| Average monthly premium | Cheap | Expensive |
Depending on your situation and what the purpose of your life insurance is, the type of life insurance that you need will change.
For example, if you are looking for a cheap policy to cover future financial obligations like college tuition, then choosing a term life insurance policy with a death benefit that matches the total tuition may be the best option. On the other hand, say you have Type 1 diabetes and have had problems with getting approved for life insurance. In this case, a permanent policy like guaranteed acceptance life insurance may be a better option for coverage.
Average cost of life insurance policies
The cost of your life insurance policy will be dependent on a variety of factors including your health, age, occupation and if you smoke. However, the largest determinant will be if you are a smoker.
Smokers will have an average cost of life insurance that is 306% higher when compared to a nonsmoker.
Average Cost of Life Insurance for Non-Smokers vs Smokers
Find Cheap Life Insurance Quotes in Your Area
Life insurance company reviews
When searching for the best cheap life insurance we would recommend getting life insurance quotes from as many insurers as possible. To aid you in this process we have provided detailed reviews of some of the best life insurance companies in the industry.
You will notice that many life insurance providers will have favorable underwriting requirements for certain individuals. For example, if you smoke you may find that Northwestern Mutual will have some of the best smoker life insurance rates available. Additionally, some insurers will specialize in certain products such as Mutual of Omaha which has one of the cheapest guaranteed whole life insurance products in the industry.
Swipe for More
Swipe for More
Life Insurance Research & Analysis
What Is Accident Insurance?
Accident insurance is a form of supplemental health coverage that pays out for certain injuries. Policies start as low as $5 a... Read More
Southern States Drive List of Most Dangerous Commutes
Between 2017 and 2019, there were an estimated 20.38 fatalities per every 100,000 workers who regularly commuted during traditional rush... Read More
What Are the 2024 and 2025 IRMAA Medicare Income Brackets?
The income-related monthly adjustment amount (IRMAA) is an extra fee high-earners have to pay on top of their Medicare Part B and Part D... Read More
Vasectomy Rates Increase After Roe v. Wade Overturn
In light of recent political developments, avoiding or terminating a pregnancy has become harder for women in the United States. Some men... Read More
Hospital Indemnity Insurance Explained
Hospital indemnity insurance pays for costs associated with a hospital stay that aren’t covered by your primary insurance policy. You can... Read More
What Is Gap Medical Insurance?
Gap health insurance helps you pay for deductibles, copays and coinsurance on high-deductible health plans (HDHPs). This kind of... Read More
What Is Platinum Health Insurance?
Platinum health insurance is the most expensive type of health plan on the market. It’s best suited for people who have ongoing medical... Read More
Pit Masters of Mistakes? Grilling Injuries More Common Among Gen Zers, Millennials and Men
Among the 70% of consumers who own or plan to use a vacation rental grill this summer, nearly 15% say they've been injured... Read More
Guide to Group Health Insurance
Group health insurance most commonly covers workers through their jobs. Some organizations also offer it to members.... Read More
Find Out if You're Eligible for Medicaid
The most common way to qualify for Medicaid is to have a low annual income. However, some states limit eligibility to qualifying pregnant... Read More
Vehicle Theft Statistics by State — and Most Stolen Cars and Motorcycles
Motor vehicle thefts are up 25.1% and motorcycle thefts are up 25.6% since... Read More