Types of life insurance coverage
There are two main types of life insurance: term and permanent. There are various policies under these umbrellas. Understanding which one is right for you can help you build a robust life insurance plan.
Term life insurance
Term life insurance covers you for a set period of time, such as 10 or 20 years, and it's sufficient for most families. Due to its simplicity, term life is often the cheapest type of coverage. Types of term life include:
- Term life
- Annual renewable term life
- Instant term life
Permanent life insurance
Permanent life insurance is designed to last your entire life. This type of coverage typically costs more than term life, but it offers additional features like cash value, which grows over time. Types of permanent life include:
- Whole life
- Universal life
- Indexed universal life
- Variable universal life
What is a life insurance quote?
A life insurance quote is the estimated cost of your policy based on basic information you provide to the insurer. The final price is determined once you submit a life insurance application and complete any necessary health requirements like a medical exam.
Term life insurance quotes
Term life covers you for a set period of time, such as 10, 15, 20, 25 or 30 years. If you die within the term, the insurer issues the death benefit to your beneficiaries. Term life is often the cheapest type of coverage and sufficient for most families. Due to its simplicity, you can get term life insurance quotes online and even buy a policy the same day.
Average term life insurance rates
These average life insurance rates are based on a $500,000, 20-year term life policy for applicants in excellent health.
Age | Average annual rate for men | Average annual rate for women |
|---|---|---|
30 | $221 | $187 |
40 | $334 | $282 |
50 | $817 | $641 |
60 | $2,361 | $1,653 |
70 | $9,297 | $8,204 |
Source: Quotacy. Lowest three rates for each age and risk class averaged. Data valid as of December 12, 2023. | ||
How to compare life insurance quotes
Use our step-by-step guide to getting life insurance quotes, and find the right coverage for you and your family.
1. Gather personal details
To get life insurance quotes, you’ll typically need to provide basic details about yourself, such as your age, weight, height, smoking habit, home address, income, marital status and occupation.
2. Choose a comparison method
There are three ways to compare quotes. You can go directly to each life insurer by visiting its website or speaking to one of its agents. Or, you can work with a broker, who collects quotes from multiple companies for you. Alternatively, you can use an online life insurance comparison tool that generates quotes from a range of companies at once*.
*Keep in mind that brokers and comparison tools may not work with every insurer on the market. So, if you want a quote from a particular company, make sure it’s on their list.
3. Compare the same policy details
Not all life insurance policies are the same. Make sure the policy type, term length, coverage amount and riders are relatively similar when comparing quotes.
on PolicyGenius
Where to buy life insurance
There are a few ways to buy life insurance:
Buy life insurance directly from the insurer
Check out Nerdwallet'sbest life insurance companiesto find the right insurer for you.
Buy coverage through an agent or broker
Alife insurance agent or brokercan help you navigate your options and fill out your application.
Shop for life insurance online
Most insurance companies offer life insurance quotes online. This makes it easy to shop around for the best coverage.
Life insurance reviews
When you’re assessing life insurance companies, look at these three factors:
Financial strength ratings
These determine an insurer’s ability to pay out claims in the future. You can check financial strength ratings through agencies like AM Best. Financial strength is a major factor in NerdWallet’s life insurance ratings methodology.
Complaint ratios
You can check a company’s complaint ratio through theNational Association of Insurance Commissioners. Ourratings methodologyfavors companies that have fewer complaints to state regulators.
Policy options
Not all companies sell the same types of policies. Narrow your choices by readinglife insurance reviewsbefore you compare quotes.
AAA | 3.0 NerdWallet rating | John Hanco*ck | 4.0 NerdWallet rating |
AARP | 5.0 NerdWallet rating | Kemper Life | 2.5 NerdWallet rating |
AIG/Corebridge Financial | 3.0 NerdWallet rating | Ladder | 3.0 NerdWallet rating |
Aflac | 3.0 NerdWallet rating | 4.5 NerdWallet rating | |
American Family | 4.0 NerdWallet rating | Lincoln Financial | 4.0 NerdWallet rating |
Amica | 4.5 NerdWallet rating | Lincoln Heritage | 2.5 NerdWallet rating |
Auto-Owners | 4.5 NerdWallet rating | MassMutual | 5.0 NerdWallet rating |
Bankers Life | 3.0 NerdWallet rating | Midland National | 4.0 NerdWallet rating |
Banner Life | 4.5 NerdWallet rating | Mutual of Omaha | 3.5 NerdWallet rating |
Bestow | Not yet rated | Nationwide | 4.5 NerdWallet rating |
Brighthouse Financial (formerly MetLife) | 3.0 NerdWallet rating | New York Life | 5.0 NerdWallet rating |
Colonial Penn | 3.0 NerdWallet rating | Northwestern Mutual | 5.0 NerdWallet rating |
Country Financial | 4.5 NerdWallet rating | Pacific Life | 5.0 NerdWallet rating |
Equitable | 3.5 NerdWallet rating | Penn Mutual | 4.5 NerdWallet rating |
Erie Insurance | 3.5 NerdWallet rating | Primerica | 3.5 NerdWallet rating |
Ethos | 3.5 NerdWallet rating | Protective Life | 4.0 NerdWallet rating |
Fabric | 3.5 NerdWallet rating | Prudential | 4.0 NerdWallet rating |
Farmers | 3.0 NerdWallet rating | RiverSource (Ameriprise) | 4.0 NerdWallet rating |
Fidelity Life | 2.5 NerdWallet rating | Securian Financial (Minnesota Life) | 4.0 NerdWallet rating |
Foresters Financial | 3.0 NerdWallet rating | Shelter | 3.5 NerdWallet rating |
Gerber Life | 2.5 NerdWallet rating | State Farm | 5.0 NerdWallet rating |
Global Atlantic (Accordia) | 3.0 NerdWallet rating | Symetra | 4.0 NerdWallet rating |
Globe Life | 2.5 NerdWallet rating | Transamerica | 3.0 NerdWallet rating |
Guardian | 5.0 NerdWallet rating | TruStage | 3.0 NerdWallet rating |
Haven Life | 5.0 NerdWallet rating | USAA | 4.5 NerdWallet rating |
Applying for life insurance
When you've found the right policy, it's time to apply. Whether you apply for life insurance online, in person or over the phone, you may be asked to provide your Social Security number, driver’s license number or list of current medications. So gather the information you need before you start thelife insurance applicationprocess.
Select a premium payment interval
You will likely be able to choose from different payment schedules, such as monthly or annually. In some cases, you may be charged an additional administrative fee to pay monthly.
Choose a life insurance beneficiary
Alife insurance beneficiaryis the person who will receive the payout when you die. Be sure you have their personal details such as Social Security numbers and dates of birth when applying.
Take a medical exam
Depending on the type of policy you're buying, you may be required to take alife insurance medical exam.
on Policygenius
Life insurance ratings methodology
NerdWallet’s life insurance ratings are based on consumer experience, complaint index scores from the National Association of Insurance Commissioners for individual life insurance, and weighted averages of financial strength ratings, which indicate a company’s ability to pay future claims. Within the consumer experience category, we consider ease of communication and website transparency, which looks at the depth of policy details available online. To calculate each insurer’s rating, we adjusted the scores to a curved 5-point scale.
These ratings are a guide, but we encourage you to shop around and compare several insurance quotes to find the best rate for you. NerdWallet does not receive compensation for any reviews. Read our editorial guidelines.
Insurer complaints methodology
NerdWallet examined complaints received by state insurance regulators and reported to the National Association of Insurance Commissioners in 2020-2022. To assess how insurers compare with one another, the NAIC calculates a complaint index each year for each subsidiary, measuring its share of total complaints relative to its size, or share of total premiums in the industry. To evaluate a company’s complaint history, NerdWallet calculated a similar index for each insurer, weighted by market shares of each subsidiary, over the three-year period. NerdWallet conducts its data analysis and reaches conclusions independently and without the endorsem*nt of the NAIC. Ratios are determined separately for auto, home (including renters and condo) and life insurance.
Frequently asked questions
Who needs life insurance?
In general, people need life insurance if their death would place a financial burden on others. Examples include breadwinners, parents, homeowners, business owners and people with co-signed debt.
Can you get a life insurance quote online?
Yes. Many life insurance companies offer free term quotes online. However, when shopping for permanent coverage, such as whole life or universal life, you may need to speak with an insurance agent to get a full quote.
How much life insurance do I need?
The amount of life insurance you need depends on how much money you want your beneficiaries to receive when you die. Ten times your annual income is a common estimate, but rules like this are not universal and may not reflect your specific situation. Take into account your current finances and future obligations — such as income, debts and daily expenses — when calculating your coverage needs.
How are life insurance rates calculated?
Life insurance premiums are calculated using a variety of factors, such as age, health, driving history, policy length and coverage amount. Insurers use this information to estimate your life expectancy, and then they set your premium based on the risk of insuring you.
How do I check the financial strength of a life insurance company?
You can gauge the financial strength of a life insurance company through ratings agencies like AM Best or S&P Global. An insurer’s financial strength can give you an idea of how reliable the company will be in paying out a future claim. This is particularly important for life insurance as these policies often have to last decades. NerdWallet recommends looking for an insurer with an AM Best rating of B+ or better.
What is the average monthly cost of life insurance?
Life insurance premiums are typically based on your age and health, and they can differ significantly among policies. For example, the average monthly cost of a $500,000, 20-year term policy for a healthy 40-year-old is $26, according to Quotacy, a life insurance brokerage. To compare, the average monthly cost of a whole life policy with the same coverage amount is $547.
What is the most affordable type of life insurance?
Term life is the most affordable type of life insurance. It lasts for a set number of years and does not build cash value. Term life is typically sufficient for most people.
