Compare life insurance quotes

What is life insurance?

Life insurance is an agreement between you (the insured) and a life insurance company. You pay a life insurance premium in exchange for a coverage amount provided to your beneficiaries by the insurer if you die during the coverage period. Your beneficiary — the person or persons you designate to receive the funds — will receive the face amount of the life insurance policy upon your death (assuming the policy is still active). The face amount, also called a death benefit, is the amount payable to the beneficiary or beneficiaries at the time of your passing. Depending on the type of policy you have, coverage will either be guaranteed for your lifetime or expire at the end of your chosen policy term.

Learn more: Guide to life insurance

How to compare life insurance quotes

If you’re in the process of getting life insurance quotes online, by phone or in an agency, you may be wondering how you can compare the options to find the right fit for you. Here are some strategies you can use to compare life insurance quotes to help ensure that you find a provider and policy that works for your needs.

1. Assess your needs: Your life insurance needs depend on your circumstances. Do you only want coverage until your children graduate from college? If so, a term life insurance policy might be right for you. Are you dealing with serious or long-term health concerns? You may want to look into companies that offer no-medical-exam policies. Do you use tobacco or nicotine products? You may want to compare life insurance rates from companies that offer life insurance for smokers to find a more affordable price. An insurance agent can help you pin down any specific needs that you might have and recommend a policy type.
2. Research multiple life insurance providers: After determining your specific financial and coverage needs, you’ll need to find life insurance companies that offer the policies you want. An insurance agent can help you learn more about a company if you’re having trouble locating the information you need on the insurer’s website. Once you have a list of life insurance companies that offer the policy type you need, you may want to compare each based on customer satisfaction and financial strength ratings from third-party agencies, such as J.D. Power and AM Best.
3. Organize your information: You may find it helpful to create a spreadsheet or list containing the names of the insurance companies, the types of policies that you discussed and the key features of each option. Take note of the different riders or perks that policies may offer. For example, a policy may have an option to include an accelerated benefit rider that allows you to access a portion of the death benefit while you’re still living to pay for medical or long-term care expenses. This could add to the value of the policy.
4. Compare your choices: Once you have all of this information organized, you can conduct a side-by-side comparison to see which policies give you the best value. A life insurance quote will tell you the type of policy it is, the amount of the death benefit or other coverage limits, as well as any riders that can be added to the policy. Your financial advisor can also look over this information and give you some insight or advice on what may work best for you.

Learn more: How to buy life insurance

Types of life insurance policies

While there are multiple types of life insurance policies, they all fall under two broad categories: term life and permanent life. The kind of policy that you choose will be based on your financial situation and your goals. Because not all insurers offer each policy type, it may be helpful to understand what each policy has to offer before obtaining a quote.

Term life insurance policies

Term life insurance is a popular option and is generally the least complex in its function and features. This type of life insurance policy exclusively provides coverage in the form of a death benefit and has no cash value buildup. For this reason, it is usually the cheapest form of life insurance available. But coverage only lasts for the term that is specified in the policy; once the term ends, the coverage expires, unless you have purchased a policy that has the option to renew or convert to a whole life insurance policy. However, this option is not always available, so it’s important to compare term life insurance companies if you wish to add riders to your policy. Term life insurance quotes may be popular with younger families with small children who may depend upon a single or primary financial contributor. It’s also usually a good choice if you only want coverage for a shorter amount of time, like as you pay off a mortgage.

Learn more: Best term life insurance companies

Permanent life insurance policies

Unlike term life insurance policies that are in force for a certain amount of time, permanent life insurance policies remain active for the duration of the policyholder’s life (as long as premiums are paid). Another element unique to permanent life policies is that they accumulate cash value that can be used in a number of ways. Generally, permanent policies are more expensive than term life policies, so it’s essential to understand the differences between them to compare life insurance rates fairly. There are also several different types of permanent policies to choose from, so you might want to explore all the options available when getting quotes.

Whole life insurance policies

A whole life insurance policy is the most basic type of permanent life insurance. Whole life insurance policies are designed to remain in force until the death of the insured. These policies also accrue cash value over time. Part of your premium is put into a cash-value account, which will grow at a guaranteed rate on a tax-deferred basis. You can access this cash value via a policy loan or withdrawal, but accessing the funds can affect the death benefit amount your beneficiaries receive in the future. It’s also worth noting that the cash value is typically only accessible while you’re living and won’t be included in your death benefit. Whole life insurance policy quotes are simple, but these policies are generally more expensive than term coverage since they last your entire lifetime in most circumstances.

Learn more: Best whole life insurance companies

Universal life insurance policies

Universal life insurance is a form of permanent life insurance with cash value and flexible premiums. The death benefit may also be flexible, which allows you to adjust your coverage as your needs change. Universal life policies accumulate interest on the cash value of the policy, and the rate of that interest will fluctuate in tandem with current interest rates.

Learn more: Best universal life insurance companies

Variable life insurance policies

Variable life insurance is a type of policy where the cash value is kept in a portfolio of mutual funds that invest in stocks, bonds, real estate and commodities. Because of this, your cash value amount can increase or decrease based on the market’s performance. It is also possible to get a higher rate of return with this type of policy than with another type of policy. Because these policies have the greatest risk, you will have to work with a financial advisor who is licensed to sell variable life insurance.

Final expense life insurance policies

Final expense life insurance is a specific type of permanent life insurance policy that is designed to pay for end-of-life expenses like funeral and burial costs. Many of these policies do not require medical underwriting, but coverage limits are relatively low and the premiums may be comparatively higher than other types of coverage.

What type of life insurance policy is right for you?

You should consider what type of financial need you want the policy to cover before shopping for the best life insurance policy. Some needs may be temporary, such as paying outstanding debts like student loans or a mortgage. But some needs could be longer-term, like growing wealth or paying for funeral costs.

If you have both temporary and permanent needs for life insurance, you might consider purchasing a term policy that has the option to convert to a permanent policy later. Alternatively, you may prefer to purchase both a term policy and a permanent policy with different coverage amounts.

For example, let’s say you need $300,000 in coverage to help your spouse pay off your mortgage if you pass away. However, you still want coverage for your funeral costs even after the mortgage is paid. Getting a quote for a $300,000 term policy to cover your mortgage commitment and a smaller amount in permanent life insurance for your end-of-life expenses may be better than choosing just one policy. If you have money saved or prepaid for your funeral, term life insurance may be all you need. Discuss your situation with a financial planner or life insurance agent to learn what approach may be best for you.

What lifestyle factors affect my life insurance quotes?

Life insurance quotes take multiple aspects of your life into account to determine your rate. For example, age is one of the biggest life insurance rating factors and may also limit you on the type of coverage you can buy. Life insurance for seniors is generally more expensive, since it’s more likely that an older insured will pass away early in the policy period. While you can’t do anything about how old you are, there are other lifestyle factors that affect your life insurance policy quotes and rates:

• Tobacco use: If you smoke or use chewing tobacco, life insurance may cost more than it would for a non-smoker. Smoking increases the risk of mortality, which means insurance companies will likely charge more for life insurance coverage.
• Health conditions: If you have any major health conditions, you may pay a higher cost for your policy. Pre-existing conditions, such as high blood pressure, cancer, heart disease, lupus, diabetes, lung disease and liver cirrhosis may result in more costly premiums. If you are a particularly high-risk applicant getting life insurance quotes, no-medical-exam coverage may be a good option, although you should keep in mind that policies that do not require a medical exam are generally more expensive.
• Prescriptions: A major health condition may not affect eligibility or premiums as significantly if the condition is well managed. Have a complete list of your medications, including over-the-counter drugs, for reference as you apply for a policy. The insurance company will most likely need to know dosage amounts, how often the medication is taken and how long you have been taking it.
• Family medical history: Most insurers want to know a bit about your family’s medical history as well. If your family has a history of heart disease, high cholesterol or other major health ailments, it could be more likely that you’ll develop these conditions too.
• Budget limitations: Your budget may determine how much life insurance coverage you can purchase. You may want to consider how much coverage you can comfortably afford so you don’t ever have to worry about your policy lapsing. Discussing your payment options with the agent during the quote process may help you decide what works best for your situation.

How to save on your life insurance premium

Life insurance can be an important part of your overall financial plan, but it can be expensive depending on your rating factors, the coverage limit you need, the policy type you choose and the riders you add. And, unlike auto and home insurance, life insurance does not offer discounts to help offset the cost. Here is a list of steps you can take to possibly earn a lower premium:

• Quit using tobacco: Many life insurers offer cheaper rates to non-smokers than smokers. If you have a year or more of non-smoking history, you may be able to get better life insurance policy quotes.
• Maintain a healthy weight: Those who fall in the overweight or obese range may pay more for life insurance, as it may be associated with a greater risk of diseases which can affect mortality. By staying within what doctors consider to be a healthy weight range, you may find that life insurance is more affordable.
• Manage your health conditions: If you have health conditions requiring medications, take them as prescribed. If lifestyle changes could help improve your condition, consider those habits as well. This may demonstrate to the life insurance company that you are actively working to manage your health condition based on your doctor’s treatment plan.
• Consider different policy types: Term life insurance typically costs a fraction of what permanent policies cost, as the coverage spans a shorter time and a death benefit is not guaranteed. Just remember that this coverage is temporary. Some term policies may offer the option to convert to a permanent policy later without re-qualifying for coverage, so you may want to ask your life insurance agent about this option when purchasing your policy.
• Consider buying life insurance sooner: The older you are, the more life insurance will probably cost. Term coverage might also not be available for older individuals.

Learn more: Cheapest life insurance companies

How to apply for a life insurance policy

If you’ve found a company and policy type that fits your needs, it’s time to apply for a policy. Applying for life insurance isn’t difficult, but you will need some information available to fill out the application. Here are some steps you can follow to make the process as easy as possible:

1. Decide on your policy details: If you’re ready to apply for life insurance, you’ve probably already figured out what type of policy best fits your needs and the coverage amount that is right for you. If you haven’t, take time to do that now.
2. Gather your information: Applying for life insurance usually involves filling out an application, so you’ll want to have your personal and health information easily accessible. This includes your date of birth, height and weight, information about medications you take and health conditions you live with, and information about your family’s medical history.
3. Contact your preferred company and fill out an application: You can often get quotes online, or you can work with a company by phone or in a local agency. Some companies even offer applications by mail. Once you know how your preferred life insurance company operates, you can fill out an application.
4. Follow the underwriting steps: Each company has its own underwriting process and steps, so from this point on you’ll need to follow the instructions given to you by your company or agent. This could include contacting a medical exam company or scheduling a doctor’s appointment for an exam, answering additional health questions or simply waiting to hear back from your carrier about your application, depending on the type of policy you’ve chosen. Not all life insurance policies have a medical exam, and some can be issued much faster than others.

If you’re unsure how to apply for life insurance or what exact steps you need to follow, it’s best to ask your agent or life insurance company for clarification, since the process can vary between companies and policy types.

Frequently asked questions