How to Buy a Motorcycle: A Guide to New and Used Bikes
Before you buy a motorcycle, there are many decisions to make — including engine size, your riding style and whether you'll buy used or... 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
Best Cheap SR-22 Insurance Rates in South Carolina
SR-22 insurance may be required to get a suspended license reinstated in South Carolina. While the fee for an SR-22 certificate is usually... Read More
How Do ISO Fire Ratings Impact Homeowners Insurance Rates?
An ISO fire rating sums up how well equipped your community's fire department is. In general, a lower fire rating means lower home... Read More
What Is Michigan Basic Insurance? Who Should Buy It?
If you're denied home insurance in Michigan, consider buying basic insurance from the Michigan Basic Property Insurance Association... Read More
Defensive Driver Courses: What's Covered, and How to Get an Insurance Discount
Want to stay safe and cut your car insurance bill? See how much you can save with different insurers by taking a class to get a defensive... Read More
How to Find The Best Home Appliance Insurance Policy
Home appliance insurance differs from most types of insurance, because it protects certain items from normal wear and tear. If you own a... Read More
Moving to California: What it’s Like to Live in the Golden State
California has economic opportunity, a diverse population and a mild climate — many, actually — but it's also very expensive. Here's... Read More
Do I Have to Use a Car Insurance Claim Check For Repairs?
Your car insurance company generally issues a check in your name after you file a claim. What you can use the money for may depend on the... Read More
Where are Potholes the Largest Problem in New York?
NYC311, New York City's call center for nonemergency services, receives more than 60,000 service requests annually from concerned residents... Read More
Choosing a Flood Insurance Deductible
A flood insurance deductible is the amount you'll have to pay before the policy covers damage to your home. A lower deductible means you'll... Read More
Compare Rental Property Insurance Coverage for Landlords
If you rent a property for a long period of time, you probably need rental property insurance, also called landlord insurance. Rental... Read More
What to Do After a Hit-and-Run in Texas
Hit-and-runs in Texas are serious offenses, carrying penalties up to 20 years in prison. If you're the victim of a hit-and-run, gather all... Read More