Life Insurance
Life insurance can safeguard your family's future. Get tips to find out which type of life insurance policy is right for you.
Compare life insurance providers quickly and easily
See which provider is right for you.
Whole life insurance combines life insurance with an investment component.
- Coverage for life
- Tax-deferred savings benefit if premiums are paid
- 3 variations of permanent insurance: whole life, universal life and variable life include investment component
Term life insurance is precisely what the name implies: an insurance policy that is good for a specific term of time.
- Fixed premium over term
- No savings benefits
- Outliving policy or policy cancellation results in no money back
Powered by Coverage.com (NPN: 19966249)
This advertising widget is powered by HomeInsurance.com, a licensed insurance producer (NPN: 8781838) and a corporate affiliate of Bankrate. HomeInsurance.com LLC services are only available in states where it is licensed and insurance coverage through HomeInsurance.com may not be available in all states. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
Life Insurance Basics
What is life insurance?
Life insurance is a contract between a policyholder and an insurance provider. In essence, it says: “If you make all of your insurance payments as agreed upon in our contract, we, the insurance company, promise to pay out a benefit to your loved ones—the beneficiaries—when you die.”
That benefit comes in the form of a cash payment, which can be paid out in one lump sum or in increments, depending on what the policyholder wants. The total amount paid out is reflective of the premiums—the regular installments of insurance payments—made by the policyholder over the course of the life of the policy.
The reason people get life insurance is so that in the event of an untimely or even long-anticipated death, the deceased person’s loved ones are looked after financially and are not suddenly forced to scramble to make ends meet, pay bills or look after themselves.
Types of life insurance are generally broken up into four categories: term life, whole life, universal life and variable universal life policies. The differences between these are centered on how long the policyholder must pay their premium, when the policy expires and under what circumstances the policy is no longer valid.
Because life events such as marriage, childbirth and major purchases impact the long-term needs of beneficiaries, it’s important to frequently reassess your life insurance policy to ensure that those you love are adequately provided for.
Do I need life insurance?
The point of life insurance is to make sure that your dependents are looked after when you pass away. Therefore, assuming you have no dependents, life insurance may not be a worthwhile use of your money. If you do have dependents, you might consider asking yourself a few questions to determine if you need life insurance and, if so, how much you ought to purchase. Possible questions include:
- How much money would your dependents need for living expenses and how long would it take until they became self-sufficient?
- Will your dependents inherit assets that can help them support themselves?
- Are there any friends or relatives on whose care and financial support your dependents can count?
In considering factors such as these, you can establish a ballpark estimate of how well taken care of your dependents will be. You can then decide how much or how little you need to contribute to a life insurance policy and which type of policy is best for you and your dependents.
How do I buy life insurance?
Before diving head-first into a life insurance policy, have some background knowledge so you can know what you’re looking for. Understanding the difference between different kinds of life insurance and their pros and cons given your circumstances will enable you to reach the goals for you have for providing for your loved ones after you’re gone.
Once you’ve established what kind of life insurance you need and how much coverage you require, your next move is to get quotes from as many different providers that fit your coverage specifications as possible. By comparing prices, you’ll be able to pick out the most-financially attractive offer on the table or, in some cases, use one offer as leverage for getting a better offer from a different provider.
Finally, after settling on the provider that’s right for you, all that’s left is the application process. This generally entails collecting the necessary personal documents, completing an application or interview and in some—but not all—cases, getting a medical examination. Note that there are policy providers that do not require medical examinations at all, so if that facet of the process is a non-starter for you, you may want to ask providers up-front whether that is a requirement for them or not.
After completing all of the necessary paperwork, tests and interviews, you simply need to wait for approval, sign any outstanding documents and, when the time comes, pay for your policy.
Latest Articles
-
What is dead peasant insurance?
Bankrate breaks down dead peasant insurance, also called corporate-owned life insurance.
5 min read Jan 19, 2024 -
Final expense insurance
Wondering if final expense life insurance is right for you? Bankrate can help.
8 min read Jan 19, 2024 -
Life insurance for skydivers
Finding life insurance as a skydiver may be challenging. Understand your options.
7 min read Jan 17, 2024 -
USAA vs. Progressive
Bankrate compared USAA and Progressive to help you find the right fit for you.
8 min read Jan 16, 2024 -
Life insurance for cancer patients
It’s tough for a person with cancer to buy a life insurance policy, though it’s not impossible.
7 min read Jan 12, 2024 -
What does life insurance cover?
Bankrate explores what life insurance covers to help you understand your options.
9 min read Jan 11, 2024 -
Tobacco and life insurance: here’s what you should know
Learn about the impact smoking has on life insurance eligibility and premiums.
7 min read Jan 08, 2024 -
The gender gap in life insurance
Bankrate plumbs the depths of the gender gap in life insurance.
7 min read Dec 28, 2023 -
USAA vs Amica
Choosing between USAA vs Amica for car insurance? Bankrate can help you decide.
10 min read Dec 18, 2023 -
8 Questions for your life insurance agent
Meeting with a life insurance agent? Here’s what you might want to ask them.
6 min read Dec 11, 2023