Compare Life Insurance Quotes
To compare life insurance quotes, make sure you’re selecting the same policy type, term (if applicable), and death benefit amount. Companies base quotes on factors such as your age, gender, occupation, lifestyle, health conditions and tobacco usage.
Key Takeaways
- When comparing life insurance quotes from various companies, make sure you’re comparing apples to apples, matching death benefit amounts, policy types and term lengths, if applicable.
- The average cost of a 20-year, $1 million term life insurance policy ranges from $25.96 to $2,392.07 a month, depending on your risk class.
- The only way to find out how much you’ll pay for life insurance is to get a quote from a company directly and apply.
Term Life
The following average rates are for a $1 million, 20-year term policy. As you can see, life insurance costs vary based on your age, gender, health conditions and tobacco usage, so the best way to find out exactly how much you’ll pay is to get a quote directly from a company.
Compare Companies
When comparing companies, it’s important to make sure you’re using the same factors when you request quotes. If possible, try to get quotes based on the same:
- Policy type
- Term length, if applicable
- Death benefit amount
- Riders, if available
You can also compare companies in terms of financial strength ratings from companies like S&P Global, or customer complaint ratings from the National Association of Insurance Commissioners.
Considerations
- Who your beneficiaries are
- How long your beneficiaries will need financial support
- If any of your beneficiaries are disabled or have special needs
- How much debt/savings you have
- Whether or not you’ll have to pay for a child’s education or a partner’s retirement
When to Buy Life Insurance
There’s no universal best time to buy life insurance. However, generally, the sooner, the better, as you can get lower rates the younger and healthier you are. Alternatively, you may want to buy life insurance after major life events, like getting married or having a child. Some people also use life insurance as a retirement plan.
Red Flags to Look For
- High-pressure sales, especially with a sense of urgency
- Premiums that are 15% to 20% lower than quotes from competitors
- No phone or email contact information on a company’s website
Term
Term whole life insurance is the cheapest type of life insurance as it only lasts for a period of time, anywhere from one to 30 years. Your beneficiaries will only receive a death benefit if you pass away during this period. Otherwise, you may have the option to convert your term policy into a permanent one at the end of its term, or renew it for another term, paying higher premiums in either case.
Whole
The most common type of permanent policy, whole life insurance guarantees a death benefit, as it lasts for your entire life as long as you pay your premiums on time. It also has a cash value component that grows based on a fixed interest rate. You may earn dividends that the company pays to you, although they’re not guaranteed.
Universal
Universal life insurance is another type of permanent policy. One key difference between whole and universal is that with universal, the premium/death benefit amounts are flexible. For example, if you pass a medical exam, you may be able to pay more in premiums and increase the death benefit. Universal policies’ cash value can grow in various ways, depending on the policy type:
- Indexed universal: Indexed universal builds cash value through a stock index like the NASDAQ. While the money isn’t actually invented in the index, it will mimic its growth, sometimes with a floor and ceiling to guarantee a minimum interest rate.
- Variable universal: The riskiest type of life insurance, VUL’s cash value grows based on investments of your choosing, typically mutual funds, stocks and bonds. While VUL has the greatest potential for cash value accumulation, there is also the risk that your cash value and death benefit amounts could decrease, if there’s no floor.
Final Expense Coverage
A more affordable type of whole life insurance, final expense coverage is meant to pay solely for end-of-life costs like burial and funeral expenses, legal and accounting fees and medical bills you had to pay for out-of-pocket. You may not need to take a medical exam to get final expense coverage.
Insurance companies calculate the risk that you will die within each policy year. They take into account factors such as your:
- Health
- Tobacco use
- Gender
- Age
- Lifestyle
- Occupation
For example, a tobacco user has higher mortality rates than a nonsmoker, so smokers pay more for life insurance compared to nonsmokers.
- Shop around and compare multiple quotes.
- Get group/employer insurance.
- Drop riders you don’t need.
- Lower your death benefit amount.
- Choose term life insurance with a short term.
- Quit smoking and wait one to two years before you apply for a new policy in order to qualify for the best nonsmoking rates.
- If you have a preexisting condition like diabetes, follow your doctor’s orders to manage it as well as you can.