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Official Guide to Shopping for Life Insurance (Companies + Rates)

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UPDATED: Mar 13, 2020

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Life insurance protects everything you have worked for and everything you love from the financial fallout of the unthinkable. It’s not a pleasant topic, but the reality is that the death of someone on whom others are financially dependent can leave them struggling to get by.

You know you need life insurance, but shopping for it is confusing, overwhelming, and generally not much fun. You want some guidance and straightforward answers to your questions.

While we can’t increase the fun of shopping for life insurance, we can make it easier. We’ll take the mystery out of choosing a policy and finding the right coverage for your needs.

We will cover who needs life insurance, what they need it for, how much they need, and how to buy it. We’ll also tell you how to compare rates and what is involved in calculating a life insurance rate.

If you want to start comparing rates, we can help with that, too. Just enter your ZIP code above.

Who needs life insurance?

When it comes to buying life insurance, there are generally two groups of people. There are those that need life insurance and know it, and those that need life insurance and don’t know it.

Ok, that is almost true. There are some people that don’t really need life insurance, at least not right now. Even those people should seriously consider buying it anyway. Why? Because life insurance only gets more expensive as you get older, and you will likely need it at some point in the future.

There are a lot of reasons you might need life insurance. All of those reasons have one thing in common: they are all about filling a financial gap that would be left behind should you pass away.

The 2018 Insurance Barometer Study, Life Happens and LIMRA, reports that 35 percent of households would feel the financial burden within a month if the primary wage earner were to die.

It’s not just the primary wage earner whose death can cause a financial burden. Consider what debts and financial responsibilities you would leave behind. Life insurance can help:

  • Ensure your family can stay in their home and maintain their standard of living
  • Pay for childcare and other assistance required after the loss of a stay at home parent
  • Pay funeral and burial costs
  • Pay off debts, including student loans and credit cards
  • Pay for a college education for your children
  • Ensure that child support and spousal support required by a divorce decree are still met
  • Leave a charitable bequest
  • Transfer wealth tax-free

As you can see, there are a lot of reasons you might need life insurance. Even if none of these things apply to your situation right now, it’s likely that at least one of them will apply eventually.

Life Stages and Insurance Needs

The need for life insurance fluctuates throughout your life. There are times when you need more, such as when you have young children. When your children are grown, that need may become less.

Wherever you are in life, there are life insurance options to fit the bill. We’ll help you decide what you need and how to get it.

When You’re Just Starting Out

When you’re first stepping out into the world on your own, life insurance probably isn’t on your mind. You’re young and don’t have a lot of financial responsibilities, and the possibility of death is far from your mind.

When you’re just starting out, you might have a tight budget and feel like life insurance just isn’t affordable. But when money is tight life insurance can actually be even more important. Students, newlyweds, new homeowners, and those just starting a new business are among those that have financial responsibilities their current savings is unlikely to cover.

Let’s take a look at some specific examples of people just starting out and their life insurance needs.

Single People

Single people are the group that is most likely to think they don’t need life insurance. With no family to provide for, it can seem an unnecessary expense.

There are several reasons, however, why a single person should buy life insurance. The first is debt. If you have student loans or other unsecured debt, like credit cards, who would be left to pay them?

Life insurance can make sure that your family won’t have the responsibility of paying off your debts. It can also ensure that your final expenses are paid for, another financial burden that may be left to your parents without life insurance.

A single person doesn’t need a lot of life insurance, but some coverage goes a long way towards ensuring your death wouldn’t leave a financial burden. A term life policy is an affordable way to do just that.

It’s also worth noting that young healthy people get the best rates on life insurance, so now is a good time to lock in a low rate. A $100,000 term policy for someone in their early twenties can be had for less than the cost of a couple of trips to Starbucks. For someone with a large student loan debt, however, that investment will make everything easier on those left behind.

Newly Married, No Children

Getting married is often the first life event that causes people to start thinking about life insurance. With someone in your life who would be greatly impacted by your death, financial planning is important.

Although couples frequently purchase life insurance for the person that is the primary wage earner, it’s actually a good idea to purchase for both people. We’ve already mentioned some of the reasons anyone might need life insurance, such as debt and final expenses, things you don’t want your spouse to have to worry about.

There’s another good reason you should both have life insurance, that that’s to allow your spouse time to grieve. There’s no provision for bereavement in the Family Medical Leave Act. A company may allow time off, but unless you have enough PTO, it may be unpaid. Life insurance provides a buffer for bereavement time.

A newly married couple should also be looking to the future. If you’re planning to have kids, putting life insurance in place ahead of time is a good move.

We’ve already talked about the best reason to buy early – lower rates. But your health status can also change over time, and you don’t want to find yourself expecting a baby and unable to qualify for life insurance due to a new diagnosis.

No one wants to think about death when they are just starting a life together. But consider what would happen to the surviving spouse who, on top of having their work turned upside down, is now left with your student loans and a mortgage on a home they expected to pay for with two salaries. Life insurance can prevent your spouse from having to sell the home and take care of debts as well.

When You’ve Established a Life

You’ve worked hard and things are stable, but you still have debt. There’s the mortgage, and you’ve probably moved into a bigger, more expensive house. You may have credit card debt or other loans.

You might have kids, and they are still years away from being able to take care of themselves. You’re thinking about their college education and securing their future.

You might also have a business that you spent years getting off the ground. It relies on you to run smoothly, and would be unlikely to survive your death.

All of these different aspects of an established life have one thing in common. They can be protected with life insurance. People in this category tend to have the largest need for coverage, and it’s now that having a term policy with a higher death benefit is most beneficial.

Let’s take a look at how life insurance can protect the life you’ve built with a few examples.

Business Owners

Owning your own business is the American Dream, and once you have made it happen you want that business to be your legacy. For most small businesses, the loss of a key person like the owner would be devastating.

If you’re the one that handles most of the day-to-day operations, your business would likely need to shut down for a while if you were to pass away. Without some money to make up for lost income during that time, as well as to pay for the expenses involved in hiring and training someone to replace you, the company may well have to close its doors.

It’s not just the company, it’s your family, too. If they depend on income from your business, life insurance can help keep it running.

Imagine you’ve started a small business with a partner. The two of you are the key people at the company, which employs a dozen people. Your partner passes away suddenly, and you need to find someone to fill his position while trying to ensure you don’t have to shut down operations, losing customers and impacting employees.

Fortunately, your partner had a life insurance policy that was taken out for just that purpose.  You’ll be able to keep the business open and ensure a legacy for your partner’s family.

Married, With Children

Providing for children is one of the top reasons to take out life insurance. It can ensure the kids can stay living in the home they’re used to and maintain their standard of living. It can also pay for college when a parent passes away before they’ve had time to save.

90 percent of people believe that a family’s primary wage earner should have life insurance, according to the 2018 Insurance Barometer Study, Life Happens and LIMRA. But what about the other spouse? If you are married with children both spouses should be covered.

We’ve already pointed out how life insurance can allow family time and space to grieve. If you’re the primary wage earner and need to take time off work to deal with the loss of your spouse and care for your children, life insurance can help.

There’s more to it than that, however. A stay-at-home parent takes care of any number of jobs for the family. That list can include cooking, cleaning, and childcare.

Consider the example of a stay-at-home parent who is responsible for the care of children that are too young to go to school passing away suddenly. As the primary wage earner, you have to keep working to pay the bills, which means you now have to pay someone to watch those children while you are at work.

On top of that, you may need to consider a house cleaning service, because housework is too much to fit into your busy schedule as a newly single parent working full time. You now have to find the money to pay for both of those things on top of the final expenses for your spouse.

Life insurance for both parents simply makes good sense. It protects your family from the many financial problems that can make life difficult at an already difficult time.

Single Parents

Whether you are divorced or the sole parent in the lives of your children, you need life insurance. Your kids are the most important thing in your life, and as a single parent they rely on you even more.

Life insurance can provide the means for either your ex or your guardian of choice to care for your child if you were gone. Even if you don’t have custody of your child, it’s important to provide for their future. Many divorce decrees require life insurance to replace child support payments.

Like married couples, divorced couples should see that both people carry a life insurance policy. The sudden death of either person will place the entire financial burden of raising the child on the other.

In the case of a single parent with no other parent around, life insurance is even more vital. You’ve probably chosen someone to become the guardian of your child if you die. You can make sure that person has financial assistance to take on that task by providing a life insurance benefit.

When You’re Headed for Retirement

The finish line for your days at the office is near, and your financial responsibilities are lightening. You may be asking yourself if you still need life insurance, and term policies you took out when you were younger are liking expiring.

If you have kids, their dependency on you financially may be drawing to a close, or even have ended completely. You may have paid off your mortgage (or be very close), and feel like

Empty Nesters

Even if your kids have moved out and are starting careers of their own, there are still good reasons to keep a policy in force. You might be thinking about converting your term life to whole, or considering a smaller, final expense policy.

For some people at this stage of life, there is enough savings to make life insurance seem less necessary. You never know what the future holds, however, so it’s a good idea to keep at least a small policy in force. A serious illness could easily drain your savings to pay for medical bills.

Life insurance with a living benefits rider is another good way to be prepared for the possibility of a serious illness that drains your finances. Life insurance was once difficult to obtain and expensive for people nearing retirement, but there are plenty of affordable options today that will allow you to protect your family.

What would happen if you were diagnosed with cancer and had to spend your savings on medical bills? Once you’re diagnosed, it’s very difficult to get life insurance. If you already have a final expense policy in force, however, you won’t have to worry about how your family will handle funeral costs.

When Your Work is Done

You’ve retired and it’s time to spend your golden years enjoying everything you have worked for. With the mortgage paid, your kids adults with kids of their own, and few debts or expenses left to worry about, you’re probably a lot less worried about life insurance.

That doesn’t mean there’s no reason to buy a policy now if you don’t already have one. And it certainly doesn’t mean you should cancel any insurance you already have in place. Let’s look at who is in this group and why they need coverage.

Seniors

Seniors are the group of people that are most concerned about final expenses. If you’re living off your retirement savings and on a fixed income, having enough money to pay for the funeral can be a big worry. The life insurance industry has responded to that need with affordable options for seniors.

If you’re just looking to cover final expenses, you don’t need a large life insurance policy. That said, if you already have a larger policy in force, keep it. You’re likely paying a better rate on that policy than you’d get on a new one with a smaller death benefit.

If you don’t have it, it’s likely you can still buy it. Final expense life insurance for seniors is usually offered with smaller death benefits, up to around $25,000. That small benefit allows the company to provide the coverage at a more affordable rate.

You’ve planned carefully for your retirement, but unexpected expenses like medical bills can put a dent in your savings. On top of that, you have the worry about your children’s finances and the burden a funeral would place on them. With a life insurance policy in force, that worry is one less thing to think about.

What Life Insurance Covers

When you think about the reasons to buy life insurance you probably think about providing for children and final expenses. But there are a lot of things life insurance can cover outside of the obvious. Some of them may even surprise you.

Unfortunately, we don’t know when a tragedy will strike. No one wants to think about it, but planning for the unexpected is important. What would happen if your spouse were to pass away unexpectedly?

You would not only have to raise your children on a single income, but pay all of the bills including mortgage from that one income as well. Now imagine your spouse has also left behind a lot of credit card debt and some student loans. Life insurance can pay for all of these things and still provide for the future, covering things like college tuition.

Let’s look more closely at the many things life insurance covers.

Paying Off Debt

The most difficult debt to pay off when someone passes away is unsecured debt. This includes the two big ones mentioned above, which are credit cards and student loans. It also includes any kind of personal loans.

If you have a car loan, you can sell the car to pay it off. But with unsecured debt, there’s no quick way to pay it. It can leave a big financial burden behind for your family.

According to Experian, Americans carry an average of $35,359 in student loan debt. The Federal Reserve’s most recent Survey of Consumer Finances reports that credit card debt is the most common form of debt for American families, even more common than a mortgage, with 43.9 percent of families carrying credit card debt.

Life insurance can pay off unsecured debt quickly, preventing your family from struggling to pay it while it continues to be charged interest. It’s one of the most universal needs for life insurance.

Paying Your Mortgage

As we have mentioned above, some debt is secured by an item that could be sold to pay off the debt if needed. a mortgage is one such debt. It’s the biggest debt most people have. The average mortgage loan debt in the United States, Experian reports, is $202,284.

While your family could sell their home to pay off the mortgage in the event of the death of the primary wage earner, that’s probably not what you want. In a difficult time, your family’s ability to maintain stability and stay in their home is important. Life insurance can make sure that happens.

It’s important to understand the difference between life insurance to pay off your mortgage and Primary Mortgage Insurance (PMI). You likely have to pay PMI if you bought your home with less than 20 percent down.

PMI doesn’t protect you or your family. It protects the mortgage company in the event that you default on your loan. The best way to protect your family and ensure they can keep their home is to purchase life insurance.

Final Expenses

The National Funeral Director’s Association reports that the average cost of a funeral with a viewing and burial in 2017 was $8,755. Previous statistics show that cost is rising over time. Depending on the type of funeral you request, that cost could be even more.

Especially when a death is sudden and unexpected, funeral expenses can be a burden on those left behind. It’s unpleasant to think about, but final expenses are a certainty for everyone, regardless of whether you want a large funeral or to have things handled as simply as possible.

Remember that final expenses can sometimes include more than just the cost of a funeral. There may be final medical bills or the cost of end-of-life care such as hospice. All of these things can be taken care of with life insurance.

Leaving Money for Your Family

Your plans for your family include your income for many years into the future, and income you likely hope will increase over time. They include the savings you expect to contribute to and grow over the years. A sudden death puts an end to that income.

Life insurance can provide the money for your family that you would have been able to earn over time. It can cover such expenses as:

  • The cost of raising children
  • Paying for college
  • Providing a bequest to your children for any purpose
  • Legally required support after divorce for children or spouse
  • Providing for a spouse, including a stay-at-home parent with no current income

This is one of the top reasons people buy life insurance, and one of the toughest ones when it comes to calculating how much you will actually need. When thinking about leaving money for your family, it’s important to look to the future and consider how the need might change over time.

Bequests and Charity

For many people, leaving a bequest to a charity or group close to their heart is an important reason to buy life insurance. This can include leaving money to a religious organization, a hospital, a foundation, or any charity.

This sort of bequest allows the money to be transferred tax-free and without having to go through probate. It allows your name and memory to live on through helping others even post-humously.

How much life insurance do you need?

The million-dollar question (sometimes literally) when shopping for life insurance is that of how much you actually need. You don’t want to be underinsured, but you also have a budget to stick to, so you don’t want to pay more than you need to.

It’s not something you want to simply take a guess at, but fortunately, there are several tried-and-true methods of deciding how much life insurance to buy. Let’s take a look at the two most popular rules of thumb.

Multiplying Your Income

The simplest method of calculating your life insurance needs is to multiply your income. The general rule here is your income times ten. So, if you make $50,000 a year, you need $500,000 in life insurance.

In addition to this number, it’s also recommended that you add an extra $100,000 for each child. If you have two children that brings your total need up to $700,000.

Of course, being the simplest rule means it runs the risk of over-simplifying. It doesn’t take into account the possibility that your income will increase over time. It’s important to look to the future when you’re calculating, and add a little extra to allow for that. Adding extra also allows for increases in cost of living over time.

One last thing to consider when you’re buying life insurance is how many years of income you really need to cover. This depends on how old you are now and how old your children are. If you’re buying life insurance when they are very young, there are many years ahead when they will need care. Older kids will be on their own sooner.

DIME Formula

A more involved method of calculating life insurance needs is the DIME formula. This stands for Debt, Income, Mortgage, Education. These are the four aspects of financial need you should look at in your calculations.

Debt is everything that would need to be paid off if you were to pass away. This generally refers to unsecured debt that can’t be paid off in some other way (such as by selling a car). It includes credit cards, student loans, and personal loans. You may choose to also provide for a car loan to be sure your family will have transportation.

Income refers to how much money you make annually as well as the amount you expect to make in the future. As mentioned above, experts recommend you have ten times your salary in life insurance.

Mortgage is, of course, what you owe on your home. If you want your family to be able to stay in their home, and they would not be able to pay the mortgage without your income, your life insurance can cover it.

Education refers to the money you would like to put aside to provide for college tuition for your children. This is where that extra $100,000 per child comes in.

Let’s say you owe $10,000 on credit cards and have $15,000 remaining in student loans. You make $65,000 a year and have one child. Your mortgage is $200,000, and you would like for it to be paid off in full if you should die.

Using the DIME method, you need to take out $985,000 in life insurance. Of course, this number can and will change over time. You’ll pay off debts. You’ll make more money. But as a solid base for taking out a policy right now, DIME provides a good number.

Two Main Types of Life Insurance

There are two main types of life insurance available. One offers lifelong coverage, while the other is in place for a set number of years.

Different types of life insurance can be stacked to add up to the total amount, allowing for a smaller policy to stay in force and a larger term policy to expire as the need for coverage declines. Let’s take a look at the types of coverage you can buy.

Term Life

Term life is a temporary insurance policy. It is taken out with a specific term length, which can range anywhere from one to 30 years. Because it has an end date for the coverage, term life is cheaper than whole life.

Term life is best if you need a large amount of life insurance for a specified period of time, such as while your children are minors. Once they are grown and moved out, you won’t need as much coverage and you can allow your term life to expire.

There are both pros and cons to choosing term life.

ProsCons
The most affordable optionHave to guess how long you'll need it
Large death benefitsNo cash value
Select the number of years for which you need coverageMore expensive if you need to take out a new policy later in life

Term life can be renewed at the end of the term, but your rates will go up in accordance with your age. It can also be converted to a whole life policy, but again rates will be affected by age. It does give you the option to continue the coverage if you really need it and are willing to pay more.

A perfect example of a need for term life is a parent and main wage earner for a family with young children. With the kids still at home for many years to come and a mortgage to pay, a larger term life policy is needed. Our example parent could take out a 30-year term policy covering the needs of the kids as well as replacement income and debt payment at an affordable premium.

By the time that policy expires, the kids will be grown and the mortgage potentially paid off. The need for such a large death benefit will no longer be there, and the term policy can then we allowed to lapse.

Whole Life

Whole life is a type of permanent life insurance policy that includes both a death benefit and a cash value account. It’s lifelong coverage at a level premium, which makes it good for peace of mind but also more expensive.

Under the whole life banner you’ll find a type of policy that is marketed towards seniors – final expense. These policies are whole life with a generally smaller death benefit. They promise coverage that is guaranteed with a level premium that won’t go up.

Another form of whole life is universal life. Like a whole life policy, universal offers permanent coverage with a cash account. It also has more flexibility, with options to adjust premiums and death benefit over time.

The cash value account that comes with a whole life policy can be accessed as a loan or withdrawal for any purpose. That account can also be used to pay the premiums on the policy in times of financial trouble, keeping it in force.

The cash account also leads whole life insurance to be viewed as an investment. The account does earn interest, and it’s low risk. This type of investment doesn’t tend to come with much in the way of returns, but it’s fairly safe and stable.

ProsCons
Lifelong coverageMore expensive than term
Cash value accountHarder to get large death benefits
Level premiums for lifeNot the highest return on investment

So who should buy whole life? Let’s say you’re a single person with no intention of getting married or having kids. You don’t have a lot to worry about in terms of who will struggle financially should you pass away, but you do want to make sure final expenses are covered, and leave a few bequests as well.

In this scenario, whole life is a good choice, It provides for both needs and it also offers the extra advantage of the cash account that you can access if you have an unexpected expense to cover.

Average Cost of Life Insurance

You probably know you need life insurance, but can you afford it? The cost of life insurance can seem daunting, especially if you’ve run the numbers and your need for coverage is pushing (or reaching) seven figures. Above we calculated a need for nearly $1 million in coverage. If that sounds unaffordable to you, you’re not alone.

We’ll look at life insurance rates from every angle, helping you to understand how they’re calculated. We’ll then help you to find out how to get the best rate.

First, let’s cover what impacts life insurance rates, from factors related to your health to the factors you might not have considered, like your hobbies. Then we will look at the actual numbers, with sample rates and how they apply to you (or how they don’t). Finally, we’ll help you find life insurance you can afford.

What Impacts Rates

Life insurance companies calculate their rates by determining the level of risk each person represents. In other words, how likely are you to die during the policy term, or for whole life, how long you can be expected to live before a claim is filed.

This means that life insurance companies are looking at your health and aspects of your lifestyle that put you at risk. These include your job, your hobbies, and the use of alcohol and drugs.

How do they get this information? When you apply for a life insurance policy, you sign your agreement to allowing the company access to your medical history and other factors. They’ll use sources such as:

  • Your doctors
  • A medical exam
  • Pharmacy records
  • Medical questionnaires filled out by you
  • The Medical Information Bureau (we’ll explain this one below)

Let’s break down all of the factors and the underlying parts of those factors that impact life rates.

Policy Details

The first thing that will impact rates is the type of policy. As we have already mentioned, term life is cheaper than whole life. Rates for various sub-types of these categories will also vary.

The amount of the death benefit will be a major part of the rate you pay. A $100,000 policy will cost significantly less than a $1,000,000 policy.

Finally, any riders you choose to add to the policy will affect how much you pay, The cost of the rider will vary depending on the insurance company and the type of rider. And, of course, the more riders you add, the more the rate will increase.

Demographics

Basic factors about who you are will have an impact on what you pay for life insurance. The largest of these is your age. The older you are, the shorter your remaining life expectancy. That makes you a higher risk for the insurance company.

Two other demographics factors will also impact your rates. The first is your gender, and the second your marital status. for both of these, the statistics on life expectancy are the reason.

Women live longer than men on average, which means they pay lower life insurance rates. The same goes for marital status. Studies have shown that married men have a longer life expectancy than do married women. T

Health

Your health is a really big one, for obvious reasons. Since the life insurance company needs to balance how much you pay against how long you will live, and health problems can tip the scales.

Your current health will be determined by your medical records, a medical exam (unless you have selected a no exam policy), and medical questions asked as part of the policy. The insurance company is looking for a healthy weight, clean bloodwork, and any diagnoses that might impact your life expectancy.

They’ll also look into the past, and that’s not just your past, but also your family’s. Some conditions run in families, so if members of your immediate family have been diagnosed with things like heart disease or cancer, it can increase your risk.

Since the type of prescriptions you take (or have taken in the past) can indicate problems, the insurance company will also look at your prescription history. This is obtained from pharmacy records.

We mentioned the Medical Information Bureau as one of the sources of information above, and you’re likely wondering what that actually is. MIB is a database of information that has been gathered by life insurance companies. If you have never applied for life insurance before, you won’t have a file. If you have, the file will contain any medical information gathered by those insurance companies.

Risky Behavior

Lifestyle factors can also impact your life insurance rates. Smoking is probably the biggest and most well known of these. It’s so impactful that life insurance companies offer an entirely different rating structure for smokers.

Other bad habits that will affect your rates are alcohol and drug use. Part of the medical exam will be a blood test that includes a toxicology screening. This will make clear any drug use you may have forgotten to mention on your application.

The other side of lifestyle is risky activities. If you like to skydive or free-climb mountains, life insurance companies are going to see you as a much higher risk.

Occupation

Finally, if your job puts you at risk, you will pay more for life insurance. Some examples of high-risk occupations include:

  • Loggers
  • Miners/extraction workers
  • Pilots
  • Commercial fisherman
  • Iron and steel workers
  • Law enforcement officers that work in high-risk branches such as SWAT team
  • Power line workers
  • Long-haul truckers and other people that are on the road a lot
  • Roofers

Comparing Rates

We’ve covered all of the various things that affect your life insurance rate. The last thing that matters is where you buy it. Rates differ quite a bit from company to company, and that’s why you need to shop around and compare.

Sample Rates

Let’s take a look at some sample rates for both types of life insurance.

First, some rates for term life. This first table shows three term lengths and three different levels of coverage for a 30-year-old male non-smoker.

Coverage Amount: 30-Year-Old Male, Non-Smoker10-Year Term20-Year Term30-Year Term
$100,000$10.85$12.53$16.36
$250,000$13.45$17.45$24.41
$500,000$18.56$26.22$37.93

Next, rates for the same policies, but for a 30-year-old female.

Coverage Amount: 30-Year-Old Female, Non-Smoker10-Year Term20-Year Term30-Year Term
$100,000$9.86$11.68$15.34
$250,000$11.32$14.88$21.52
$500,000$14.63$20.89$31.42

Now we’ll look at some whole life rates. Whole life is more expensive than term, so you’ll note right away how much higher these rates are.

Coverage Amount30-Year-Old Male30-Year-Old Female
$100,000$98.47$87.78
$250,000$223.76$197.78
$500,000$438.82$387.30

As you can see, whole life rates climb fast when you increase the death benefit, quickly becoming unaffordable for a lot of people. That’s why term life is the more budget-friendly option if you need a large amount of life insurance.

If you really want some lifelong coverage but need a much larger death benefit for a specific period of time, that can be accomplished by taking out a small whole life policy and a much larger term life policy at the same time. This will give you the coverage you need at a better price.

How do sample rates apply to you?

It’s important to note at this point that our sample rates are provided by insurance companies for the specified age group and based on someone in excellent health. When you get quotes, they are going to look different.

All of the many rating factors we listed above will come into play for you, which means the sample rates can really only be used as a general idea. What sample rates do tell us that’s very useful is how much rates increase based on things like coverage amounts and term lengths.

You can see from the tables above that you can get a lot more coverage for a longer time period without a huge jump in the monthly cost. That means it’s well worth considering that large death benefit or a 30-year term over a 20-year. It won’t cost you as much as you’d think.

These sample rates were also provided based on an average of quotes from a lot of different companies. In the section below, we’ll talk about how much companies can differ in price, and how to choose the best company for your insurance needs.

Comparing Companies

As with any type of insurance, life rates vary by company. Sometimes they can vary quite a bit. Here’s a look at some sample rates from three different companies.

Company$100,000, 30-Year Term$100,000 Whole Life
Assurity LifeMale: $9.22
Female: $7.57
Male: $110.14
Female: $98.14
Minnesota LifeMale: $7.37
Female: $7.04
Male: $91.72
Female: $82.60
State FarmMale: $21.84
Female: $17.23
Male: $107.71
Female: $97.35

State Farm’s term rates are higher by quite a bit than either of the other two companies. Minnesota Life’s rates are the lowest in both categories. Once again, however, which company has the best rates for you will differ from these samples.

Some companies offer better rates than others for smokers, while other companies have a better price for high-risk occupations. This is why shopping around and comparing rates is so important.

Rate is only one of the factors to consider when choosing a company. You’re giving money to the life insurance company on the expectation that they will pay the claim if and when the time comes. That means you need a company that is financially strong.

Below you’ll see the top five individual life insurance companies by market share. We’ve also included their score from A.M. Best, one of the top names in insurance company financial ratings.

CompanyMarket ShareA.M. Best Rating
Lincoln National5.8%A+
MassMutual4.8%A++
New York Life5.7%A++
Northwestern Mutual8.2%A++
Prudential4.5%A+

Both A+ and A++ ratings are considered “Superior” by A.M. Best. That means all of these companies have the highest level of financial stability.

Before you choose, you will want to get a little more in-depth on each company on your list. Our company reviews can help you to choose a company that’s both financially strong and has a good reputation for taking care of customers.

The Bottom Line

There are good reasons to buy life insurance at every age and every stage of life. Whatever your reasons, waiting to purchase coverage will only result in higher rates. Buying young is the key to locking in a low premium and providing the coverage you need for the future.

No matter how old you are, however, or what your situation is, shopping around is the best way to get the right coverage for you at the best price. Armed with all the knowledge we’ve provided here and our in-depth company reviews, you can feel confident when you sign that life insurance application that you’ve made the best choice.

Life insurance does come at a cost, but the peace of mind it provides is priceless. Start shopping and comparing rates right now. Just enter your ZIP code below for free quotes from top insurance companies.

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