Best Life Insurance Companies

See If You Qualify for Lower Rates

Navigating life’s twists and turns is easier when you’re prepared. Life insurance acts as that safety net, ensuring your loved ones remain financially protected even when life throws a curveball. With diverse policies catering to various needs, understanding your choices is the first step to making an empowered decision.

At TrySmartly, we streamline this decision-making process. Discover life insurance policies that align seamlessly with your aspirations and commitments, fortifying your family’s financial future.

Here are some of the best life insurance companies on the market:

How Does Life Insurance Work?

Life insurance is a contract between the policyholder and the insurance company. By paying premiums, you secure a promise from the insurer that they will provide a predetermined sum, known as the death benefit, to your chosen beneficiaries after your passing.

Step 1: Choose Life Insurance Policy

The journey starts with life insurance policy selection. Based on your individual goals and needs, you can opt for a particular life insurance type, be it term, whole, or any other variant. Following this, you will make regular premium payments either monthly, quarterly, or annually. Most policies require the applicant to undergo a medical examination to issue them with life insurance quotes.

Step 2: Choose Beneficiaries

You then choose your beneficiaries. Your chosen beneficiaries are not limited to family members. A policyholder can choose anyone – friends, business partners, charitable organizations, and others. Upon the policyholder's demise, it's their responsibility to initiate the claim process to receive the death benefit.

Beneficiaries can use this benefit for various purposes, such as covering debts, funeral costs, or pursuing educational goals. In some cases, such as mortgage life insurance, the insurer may cover housing-related costs.

Types of Life Insurance

There are several types of life insurance policies tailored to specific needs, durations, and benefits. With the right insights, choosing a life insurance plan becomes significantly straightforward. TrySmartly is a platform that will help you in your search for some of the best life insurance policies for you and your loved ones.

Term vs. Whole Life Insurance

Two primary life insurance variants include term and whole life insurance. But here's how they differ from each other:

This policy covers the policyholder for a specified term, often ranging from 10 to 30 years. Beneficiaries receive the death benefit if the policyholder passes away within this term. Once the term finishes, the policyholder may choose to renew it at a higher rate. This is typically the most cost-effective life insurance option.

Unlike term life insurance, whole life insurance offers lifetime coverage and typically comes at a higher cost. Alongside the guaranteed death benefit, there’s a cash value component, which grows tax-deferred over time. This cash value can be borrowed against or cashed out, making it a savings or investment vehicle in addition to being a guaranteed minimum.

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Universal Life Insurance

Like whole life insurance, universal life insurance provides both a death benefit and a cash value component. However, policyholders can adjust premium amounts and death benefits within certain limits. This can be advantageous for those anticipating financial changes, offering the ability to reduce or pause premiums during tough times. The interest rate for the cash value component is usually pegged to a financial index, ensuring it stays in line with current market conditions.

Here are some of the companies that offer universal life insurance

Insurance Company Average Female Monthly Cost Average Male Monthly Cost
StateFarm $55 $70
Lincoln Financial $57 $74
Nationwide $60 $77
MassMutual $67 $89

Variable Life Insurance

Variable life insurance merges insurance with investment. While it provides a death benefit, it also offers an investment component where the cash value can be invested in various sub-accounts similar to mutual funds. This offers the potential for higher returns but comes with the associated market risks. If investments perform well, the cash value and death benefit may increase, but if they fare poorly, the opposite can happen.

Long-Term Life Insurance

Long-term life insurance provides coverage that lasts for the duration of the policyholder's life. This is often synonymous with whole life or other permanent policies designed to offer peace of mind that beneficiaries will be cared for, no matter when the insured individual passes. Because of its lifelong duration, long-term life insurance premiums are generally higher than term policies.

Short-Term Life Insurance

As the name suggests, short-term life insurance is designed to offer coverage for a limited time, typically up to 10 years or less. It can serve as a stop-gap measure for individuals who anticipate getting a long-term policy later but need immediate coverage. Given its shorter duration, premiums are often lower compared to long-term policies.

Life Insurance Rider

A life insurance rider is an add-on to the main policy, which allows customization for unique needs or concerns at an additional cost. Some of the most common riders include:

Allows early access to a portion of the death benefit if diagnosed with a terminal illness or specific medical conditions, often used to cover end-of-life care or medical expenses.

If the policyholder becomes disabled and can’t work, this waives the premium payment, ensuring continuous coverage.

Pays for long-term care services, such as nursing home care, home health care, or assisted living expenses.

Additional benefit if death results from an accident. The amount is often equal to the base death benefit, effectively doubling the payout.

Provides temporary life insurance coverage for the insured’s children. This coverage can usually be converted to permanent insurance when the child reaches adulthood without a medical exam.

Allows policyholders to purchase additional coverage at specific intervals without undergoing further medical examinations, ensuring that as their need grows, so does their coverage.

Provides a lump-sum benefit if the policyholder suffers a heart attack or stroke or is diagnosed with cancer. This helps cover unexpected medical bills and living expenses.

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Family Life Insurance Policy

A family life insurance policy is an all-inclusive solution that covers multiple family members under one umbrella. It often includes primary coverage for the breadwinner, complemented by additional coverage for the spouse and children.

If the primary policyholder or any beneficiary passes away, the remaining members will receive their respective death benefits. Its convenience lies in consolidating multiple insurance needs into a single policy, often at a more affordable rate than individual policies.

Survivorship Life Insurance

Survivorship life insurance is a joint policy that covers two people, typically a married couple. This type of policy only pays the beneficiaries after both individuals have passed away.

Survivorship life insurance can be especially valuable in estate planning, as it ensures the heirs receive a death benefit that can help cover potential estate taxes or other associated costs after the death of the second policyholder.

Mortgage Life Insurance

This type of life insurance policy is specifically designed to help your family repay a mortgage if you pass away before it’s fully paid off. Instead of the death benefit going to beneficiaries directly, it’s paid to the mortgage lender. It offers peace of mind that your loved ones won’t be burdened with mortgage debts.

Final Expense Life Insurance

Final expense life insurance primarily covers the costs associated with end-of-life expenses like funerals and medical bills. It typically comes with lower coverage amounts than traditional policies. Often popular among seniors, it ensures families aren’t financially strained during already challenging times.

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How Much Life Insurance Do I Need?

Determining the appropriate amount of life insurance is key to ensuring your loved ones are taken care of in your absence. Coverage amounts typically range from as low as $10,000 to over $1 million, and the extent of your coverage directly influences the premiums you pay. The broader the coverage, the higher the premium, and vice versa.

TrySmartly can help you make an informed decision in your search for some of the best life insurance policies with comprehensive coverage and affordable rates. Here are some things to consider when deciding on the amount of coverage.

Assess Your Financial Obligations

Your immediate debts, such as mortgages, loans, and outstanding bills, lay the foundation for the base amount of coverage. Ensure you calculate the total of all current obligations so that your family isn’t burdened with them in your absence. On average, many opt for coverage that’s at least five to 10 times their current annual income.

Factor in Future Expenses

Life moves forward, bringing expenses like your children's higher education, your spouse's retirement needs, or even potentially significant medical bills. Anticipate these future expenses to determine a more accurate coverage amount. For instance, college tuition for your kids in the next decade might be a significant figure to consider.

Protect Life’s Milestones

Life's key events – weddings, home down payments, the birth of children, or even dream vacations – require substantial finances. Your coverage can ensure these milestones are comfortably financed without depleting savings or assets.

Consider Inflation and Economic Changes

Today’s dollar might not hold the same value in the future. When deciding on the amount of life insurance coverage, consider inflation and economic factors. A sum that seems substantial now might be barely adequate in 20 years. Try inflating your desired coverage by at least 3% annually to account for potential economic shifts.

How Much Does Life Insurance Cost?

The cost of life insurance policies varies based on multiple factors, from the type of insurance and the coverage amount to individual factors like age, health, and lifestyle choices. While it's tempting to go with the cheapest policy available, make sure it is comprehensive and meets your specific needs.

Average Life Insurance Rates Per Month

The average monthly life insurance rate in the United States is $26. Below, we break down average monthly rates for life insurance based on policy type, gender, and age.

The average monthly rates for a 20-year term life insurance policy with a $500,000 coverage limit are as follows:

Age Average Monthly Rate for Women Average Monthly Rate for Men
30 $15 $18
40 $23 $28
50 $54 $68
60 $138 $197
70 $684 $775

The average monthly rates for whole life insurance with a $500,000 coverage limit are as follows:

Age Average Monthly Rate for Women Average Monthly Rate for Men
30 $337 $386
40 $502 $578
50 $786 $914
60 $1,295 $1,538
70 $2,218 $2,641

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Compare Life Insurance Rate

Navigating the world of life insurance also means comparing coverage options and costs from various providers. The table below provides an overview of some cheap life insurance companies. The rates are based on a 20-year term life insurance policy with a $500,000 coverage limit:

Insurance Company Average Annual Rate for a 40-Year-Old Woman Average Annual Rate for a 40-Year-Old Man
Penn Mutual $292 $342
AIG $295 $346
Lincoln Financial $289 $342
Pacific Life $290 $342
Equitable $320 $350

Life Insurance Cash Value

Within the spectrum of life insurance, the cash value component stands out predominantly in permanent policies like whole, universal, and variable life insurance. This is essentially a savings account that grows alongside your policy, fueled by a portion of your premiums and often earning interest or investment returns.

The cash value can also be borrowed against. Policyholders can take out loans using their policy's cash value as collateral. It can be a useful option when faced with immediate financial needs, as these loans usually come with lower interest rates than traditional ones. However, failing to repay the loan may severely damage your credit score and lower the death benefit.

The cash value presents several advantages, such as:

A financial cushion that can be borrowed against during emergencies.

A potential supplementary income during retirement.

The option to surrender the policy and access the accumulated cash value, although this may lead to potential penalties or reduced death benefits.

Conversely, excessively tapping into the cash value through withdrawals or loans may compromise the policy’s primary objective: to provide for beneficiaries. Over-reliance on the cash value can jeopardize and significantly lower the death benefit.

Is Life Insurance Worth It?

The decision to invest in life insurance is personal, and it often arises from the desire to ensure your loved ones remain financially stable in your absence. For many, ensuring their family’s financial security is worth it. As such, many opt for at least a minimum life insurance policy.

At its core, life insurance is a commitment. Be it a loss of income, settling debts, covering funeral expenses, or ensuring a child's education, the right policy can ensure your beneficiaries won't be burdened with financial hardships. TrySmartly is a valuable educational resource that offers insights and guidance to help you make informed decisions that fit your needs and budget.

Which is the Best Life Insurance Policy for You?

Different life stages and priorities necessitate varying coverage types and amounts. For example, young families may opt for term life insurance, which offers more affordable coverage. On the other hand, someone seeking a policy that also acts as a savings or investment tool might lean towards whole or universal life insurance.

To make an informed decision, consider the following factors:

Life Stage: Where you are in your life journey can influence the type of coverage you need.

Financial Commitments: Take stock of your outstanding debts, such as mortgages, car loans, and credit card bills. Ensuring your coverage can handle these obligations will prevent your family from inheriting your debts.

Dependents: The number of individuals relying on your financial support plays a role. For example, if you’re a sole earner in a household of four, your policy needs will differ from a dual-income couple with no children.

Future Plans: Envision your individual or family plans in the next decade or two. Whether it is paying for your child’s education or your spouse’s retirement, set these milestones as benchmarks when determining life insurance policy type and coverage amounts.

Lifestyle and Health: Insurance companies often assess risks based on lifestyle choices and overall health. You might benefit from lower premiums if you're in excellent health and maintain a safe lifestyle. Conversely, if you engage in high-risk activities or have pre-existing health issues, securing a policy earlier rather than later could be advantageous.

How to Get The Best Life Insurance?

Getting some of the best life insurance policies involves a clear set of steps to ensure you get the right coverage for your needs. Here’s a short breakdown:

Determine Your Needs: Before diving into different options, assess your financial responsibilities, dependents, debts, and future financial goals.

Research Policy Types: Familiarize yourself with the various forms of life insurance, from term to whole and universal. Understand their benefits and limitations to pick one that aligns with your objectives.

Gather Quotes: Compare quotes from various providers. This gives a sense of the market rate and allows you to find a budget-friendly policy without giving up comprehensive coverage.

Undergo Medical Examination: Some policies will require a health assessment. However, there are also options for life insurance without a medical examination. But, these policies may come at a higher cost.

Review and Finalize: Once you’ve chosen the best life insurance for you, review all terms and conditions. Ensure you understand every clause, especially regarding premium payments, policy exclusions, and cash value options, if applicable.

Begin Your Coverage: After approval, make your first premium payment to initiate your coverage. Store all policy documents in a safe space and inform beneficiaries about the policy details.

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Life Insurance Online

In today’s digital age, obtaining life insurance has never been more convenient. Potential policyholders can research, compare, apply for, and manage their policies from the comfort of their homes. Benefits of getting life insurance online include:

No need for in-person meetings or lengthy phone calls. Everything, from research to purchasing, can be handled digitally.

Multiple platforms offer tools that let you compare various policies side by side, ensuring you find some of the best life insurance options on the market.

Without the need for physical paperwork or in-person consultations, the application and approval process can be faster.

Many online platforms provide a wealth of information, helping you understand policy nuances and make informed decisions.

Once you have a policy, managing it online can be easier with digital dashboards, payment systems, and customer support channels.

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Frequently Asked Questions

Dive into this FAQ section if you still need more clarification about life insurance.

How Long Does It Take to Get Life Insurance Money?

Upon verifying a claim, it typically takes 30 to 60 days for beneficiaries to receive the life insurance payout. The exact timeframe can vary based on the policy's specifics and the insurance company's processes.

Is Life Insurance Taxable?

Life insurance death benefits are generally not subject to federal income tax. However, in some situations, you may need to pay taxes. For instance, if the beneficiaries choose to receive payments as an annuity or in installments, it could be taxable.

How to Use Life Insurance While Alive?

Some insurance policies, especially whole and universal ones, come with a cash value component. Policyholders can borrow against this cash value, withdraw a portion of it, or even use it to pay premiums while they are alive. Additionally, certain policies may offer living benefits or accelerated death benefits that can be accessed under specific circumstances, such as terminal illness.

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