Life insurance is something that not everybody would purchase. Is this insurance type worth the money? And if yes, what variant should one prefer? All the options are discussed in our detailed guide.
What Is Life Insurance?
Life insurance is a type of contract between a client and an insurance firm. The terms can be different. The main principle is the following. A client pays premiums:
- One per month;
- Once every 6 months;
- Every year.
The company collects these premiums and uses them for investing needs. It is needed for the firm to earn to be able to pay out the insurance and to gain some profit.
When the insured person dies prematurely, the company that insured him/her pays out the death money to his/her family or whoever are the beneficiaries. The firms also earn when clients don’t keep onto the rules. The company then keeps the premiums and doesn’t pay anything out.
It is important to inform family members about life insurance. The insurance company doesn’t notify anybody. If you die prematurely, your family needs to claim the money. Only then, the company pays the death benefit.
The pricing differs so much, depending on the following factors:
- Age plays a major role;
- Nicotine use is one more factor that influences the premiums;
- Gender of the client (males pay more than females);
- Medical history of the client and his/her immediate family members;
- Whether the client is into dangerous activities (sky diving, scuba diving);
- Whether the client is planning to travel to dangerous locations;
- Whether the client`s job is connected with exposure to hazards and similar.
Our Top 10 Companies – With a Detailed Review of Each
- TIAA Life is one of those life insurance companies to which you can address all your needs indeed. This company has been present for more than 100 years. It is a guarantee that it will be here when you need it most. The firm understands how important it is for you to know the premium in advance.
Also, the enterprise values your precious time. Therefore, on their website, you can find a convenient calculator. Provide the required data, and get approximate of how much you will need to pay. If you want, the company might give 1% of your insurance to charity, and you will not have to pay a single additional cent.
- New York Life is one more company definitely worth consideration. Their website is full of super useful information and practical tips. If you cannot decide what to take and whether you require something, just check out their website. There, you can encounter all the needed tips to make the best decision whether you need services.
- Haven Life specializes in life insurance only. With them, you can check which life insurance is best and get one at the most reasonable rate. This is a new player in the insurance market. But its huge advantage is backing up by one of the leaders in the insurance sector of the USA, MassMutual. Therefore, you can count on more than 160-years of experience even though Haven Life is a young firm.
- MassMutual is one of the oldest life insurance companies. It offers comprehensive coverage to all the family members if the main breadwinner passes away preliminarily. It even compensates for a possible pension gap in some cases. This is the only insurance company that offers something incredible, indeed. It is called Whole Life Legacy 10 Pay. Within this program, you can pay your premiums for 10 years. After that, you can stop paying, but your savings will continue growing.
- Gerber Life Insurance is one of the life insurance companies that provides you with the best plans if you have a kid. Its life insurance policies are developed in a way to not only protect your child but to make savings, to accumulate the funds that your child will need in the future. Of course, this is not the only plan that you can get, but we haven’t met a lot of companies that customize their plans like this.
- AAA is the best firm for those who are in the age between 45 and 85. The death money sum can reach up to 25.000 USD. The medical exam is not needed. It is also very rare for life insurance companies. The bad thing is that the family doesn’t get all the coverage if the insured client dies within 2 years from the day when the insurance entered the force. The good news that the family still gets 30% more than the accumulated premiums. For the people in this age category, such life insurance policies are perfect.
- Northwestern Mutual has over 160 years in the industry. The firm has an absolutely traditional approach to insurances. Some life insurance reviews let clients know that some tools there are rather outdated. For example, those that determine the premium costs are not the most advanced ones.
However, the company believes, and the customer confirms it, that they are very straightforward and easy-to-use. Add the constant availability of their advisors. There is always somebody to assist in determining which plan is the best. This sounds much better than just using a calculator online, doesn’t it?
- Banner Life is one of those firms that offer very precise life insurance policies. They are strictly divided into the standard options or a term, whole life, and universal life variants. Customization options almost don’t exist. Everything is precise. It might not be the best option for those who are searching to get the top customization level. However, for those looking for clarity, this is a perfect option.
- Amica is definitely worth mentioning, too. With more than 100 years of experience, this is one more company that provides all that a client might be looking for. Reasonable prices and flexible policies are additional benefits on which you can count here.
You can even switch from a term to a whole life plan. Conversion options are extremely flexible and loyal. One of their undoubtful benefits is an opportunity to get a part of the funds within the insurance if you get seriously sick. Most companies release funds only if the insured person deceases prematurely.
- Lincoln Financial is included in our list based on customer reviews and unusual, highly customizable options. Their rates are connected to some major indicators such as the Dow Jones Industrial Average. So, most probably, this is a company for those who understand something in the world of finances. Even though the company is extremely reliable and fair, it is better to understand what is happening and how the rates are calculated.
How We Chose The Best Life Insurance Companies
We don’t recommend companies just randomly. Our team has researched a lot of offers and providers. Here, in our rating, you will find the top 10 life insurance companies. Also, we have provided short reviews on each of them. These short assessments will hopefully help our readers to see whether the company is worth the attention.
The best life insurance company is available in the entire country. If you move to a different state, constantly going to your previous residence place to pay your insurance is not reasonable. Therefore, if you can, give the preference to a company that provides its services everywhere. Make sure with the company if the conditions are the same.
Does the company underwrite its own policies? Come on; such companies don’t provide anything themselves. Why would you ever need a middleman if you can contact a company directly?
The company should be financially super stable. Otherwise, how can they give you any guarantees that they will be around? There is a special standard to determine the financial stability of the best life insurance company. These criteria are provided based on the Financial Strength Rating (FSR). It shall be A+, no exceptions are accepted. If not, nobody is sure then that the company will be around at the needed moment.
No additional medical exam is needed to renew the policy. It happens that after some period, clients develop a medical condition. If you need to pass a medical exam every time to renew the life insurance policies, it is the worst thing that can be. You might stay without anything after having paid for a couple of decades. So, such companies are not considered.
Does the firm allow converting a term policy to a permanent one? Then, it might be included in our best life insurance companies rating. Only if this condition is considered, you can count on the firm.
Additionally, we consider such details as:
- The certainty or premium: reliable enterprises guarantee that during some time, you pay an established premium sum. The enterprise is not allowed to increase your premium if the agreed time is not over yet.
- A client can find any period length: the best life insurance companies offer a lot of options. Clients might select to acquire a plan for 5, 10, and so on years. Some enterprises go even further. With them, clients can choose any number of years.
- Conversion is not too restricted: some companies don’t allow converting one type of policy into a different one. With the best life insurance companies, this option is available. Clients can start with a term policy; then, they can move to the whole life option. Moreover, they can change from one plan to another.
- Guarantees in case of disability: most life insurance companies provide it. If, for one or another reason, you are classified as a disabled person, the company will keep your policy. Clients cannot count on any replacement of the funds, though.
Do You Require Life Insurance?
Not everybody needs life insurance. If all the family members work, and nobody really depends on the income of another sibling, life insurance is absolutely not needed.
But it is recommended to acquire life insurance if there are siblings who depend on a breadwinner. Research shows that if a breadwinner dies, more than half of families in the United States will be struggling, at least during the first months. If this is your case, life insurance at least can provide them with the funds needed for the funeral and to survive until they handle the situation somehow.
Principles Of Work Of A Good Life Insurance
Two main variations exist. You might definitely consider them when choosing the best life insurance:
Term Life Insurance
The entire cost of any reasonable term life coverage is undoubtedly more reasonable than any reasonable rates for a whole life version. This variation is provided for a particular life period. For instance, you consider insurance for a couple of years. The most typical options are five, ten, and twenty years. In some cases. The optimal plans specify what age the client shall reach for the plan to expire. For example, if a client gets 80 years old, his/her insurance terminates.
The main advantage of this variant is that it is much cheaper than any of even the most reasonable whole life insurance variations.
The main drawback is that it is pretty limited. If you live longer than the insured period, you will definitely never see the money. Neither your family will. When the client gets older, he/she pays more in premiums for the selected variant. An identical principle applies to situations when a client suffers from some medical conditions. In some circumstances, though, the term life variant is an optimal choice to make. With it, clients ensure their siblings and loved ones with some level of financial stability if the worst happens.
Whole Life Insurance
One can conclude from the name that this variant works throughout the entire period of life of a client. There are no limitations connected with specific timeframes. This is the major reason why any reasonable life insurance variant is much costlier than any reasonable term life variant.
Life Insurance Compared To Health Insurance: Differences, Things To Consider
It is surprising to know that even at this time, not all people differentiate life insurance from a completely different insurance class: health insurance. These types, or rather variants of insurance, are absolutely diverse.
Life insurance is paid when the insured person deceases prematurely. The aim of this variant is to compensate for the funeral-connected costs and to help the dependent persons to survive during the first time.
Health insurance is a completely different arrangement. It assists people in paying medical expenses.
While health insurance is almost a must, life insurance should be considered only if it is needed. If there are dependents in the family, life insurance should be by at least the breadwinner.
Life Insurance Versions
We have already checked what the main insurance variants are. However, these are not unique options that are accessible. Every company offers a decent number of plans in an effort to cover all the clients` needs. Some of the popular, the best life insurance policies are discussed further.
The Best Variant For A Single Adult
If the client is single and provides himself with all the needed things for a living, this is the most optimal, the best life insurance policy.
Some people believe though that it is absolutely unnecessary to acquire any life insurance if they are alone and don’t have any dependent on the people. Who can benefit from your policy, indeed?
However, the situation might not be as easy as it seems to be. Whoever the beneficiary is, he/she can make use of the funds in many ways. What about checking some scenarios?
For instance, if you decease, your family (parents, for example) can arrange the funeral. It will definitely not help them emotionally, but at least they will have a less financial burden.
If your parents have taken a loan for your studies or accommodation, they can, in some cases, repay it from the provided insurance funds. It also will help them to at least not to stay with debts.
It is a decision of every person whether he/she wants to pay for the best life insurance.
The Optimal Variant For Young Couples Or Families
If the client has a family or siblings, he/she requires the best life insurance. It guarantees that the loved people will have a particular safety level even if the worst happens. An option for the entire life is an optimal version for you. Even though such an option is costlier than a term life one, it offers some significant benefits. For example, death money is not the unique benefit that your siblings get. Normally, over a long time, clients accumulate a significant sum of money. Some banks are very welcoming to such types of clients who want to take a loan against the funds saved in this way.
Considering that this best life insurance coverage comes at a good cost, you should indeed learn all even the most insignificant details to find about the best and fairest options from the huge number of insurance firms around.
If You Are Bringing Up A Kid
If the client has a small kid, the best life insurance is no doubt term life one. Here, it is spoken about the insurance for that small family member, not for the client. The best life insurance sold by one of the top life insurance companies provides the little one with a plethora of opportunities later.
When your child grows enough, he/she might use the saved funds to get a loan for a college or even to buy a new home. And there will be enough funds already accumulated, and this will be a great support for your main family member.
For Older Clients And Those With Medical Conditions
It is highly recommended to acquire the best life insurance with a guarantee that the death funds will be released if a citizen, a potential client, is an elderly person or has some chronic medical conditions. It means that your family members get the funds in any circumstances. It will help them to pay at least the connected funeral expenses.
We insist on buying this insurance version from the top life insurance companies discussed above.
Can An Ordinary Citizen Pay A Life Insurance?
The costs that clients pay for their insurance depend on so many factors. It is senseless to check all of them. Those best life insurance companies develop extremely complex formulas to calculate your premium. The main factors are though the physical condition of a client. The client`s age is also one of the influential factors.
Here, there is one significant detail to consider seriously. Some firms offer to renew insurance without an additional medical exam. It is recommendable to apply for the most optimal plan when you are still young and when the health is still strong. Then, your premiums will be very reasonable.
Here, you can check some factors that can increase or decrease your premiums significantly:
- Younger people tend to pay less than older ones;
- Smoking increases the premiums up to twice;
- If you reside in New York, it will also increase your premium up to twice.
There is one more trick that life insurance companies apply. Sometimes, especially if a client is young and looks very fit, they don’t ask to pass any medical exams officially. Some people get happy and believe that the firm is so loyal. But this is not the case. The firm will believe then that the client is risky. It influences the premiums that the client needs to pay. That’s why we insist that the clients still do all the required medical exams. It provides you with the required papers to decrease the premium sums.
Life insurance companies are not stupid. They never give even a single coin. Therefore, be ready to pay more if your job is about traveling in airplanes, going to dangerous places, and similar. Everything will be checked and studied.
Key Considerations before Acquiring a Life Insurance
It is difficult to encounter the optimal, the best life insurance. To do it, the client needs to verify a number of crucial details. There are a plethora of variations to choose from. There are any plans designed for the very specific needs of any client. We have prepared some tips. They will assist every client in determining which insurance variant suits him/her most.
If the main aim of the client is to protect siblings, the whole life variation is an optimal choice. With it, the client not only provides the siblings with death money but can make some savings. This insurance variant might be pretty costly. The client should calculate all the liabilities and debts. Only then, he/she can assess whether this insurance is an asset affordable for your specific case.
Variable life variation is tied with the value of specific assets you have ever invested in. If the price of the specific asset is high, the death funds are growing.
The universal one is the most optimal, the best life insurance for clients who don’t have a constant income. This insurance variation allows changing the sums of premium and even skipping some payments. The sum of death money and savings can be varied, too.
A variable universal version is a reasonable combination of both previous insurance variants. It is connected with the value of some assets and allows the required flexibility.
As a final note, it is worth adding again that you should acquire your insurance from exclusively the best insurance companies. Only then you and your dear people can count on financial assistance if the worst happens.
Some people still believe that if a person stays at home, only the one who works needs insurance. The latest research shows that if a spouse stays at home taking care of the house, kids, and similar, he/she saves you around 160 000 USD per year. This is the sum that you would be required to pay if you needed to look for assistance from outside. Therefore, buying a policy in such a case is rather reasonable.
Think About Your Liabilities
Before deciding on whether you indeed need life insurance and how much your premium should be, consider everything very carefully. If you still have to pay a mortgage (consider the term, it might be easily 20 to 30 years), the loans that you have taken to study, and so on, calculate properly what you can really afford. If you already have kids or are expecting to have kids, calculate the required costs. You are obliged to raise them and to handle the payments for their studies.
Particular life insurance companies on their websites provide the services of a specific calculator. There, you type in the data, and it shows the approximate of the sum you would pay.
PROS & CONS Of Life Insurance
Every life insurance variant has its advantages and cons, just like any other offer. The major benefits are:
The client is ensuring his/her siblings and family. If the client is their main breadwinner, his/her death will cause the siblings struggle. If you acquired life insurance, the firm would assist your siblings in managing all the expenses for the funeral and resisting financially for some time.
Your siblings can use the death money to pay debts and loans, and similar.
Your kid can pay his/her college or even acquire a new home when he/she grows.
The disadvantages are:
Life insurance is not needed in some cases. Therefore, some people might end paying for the service they don’t need.
The benefits are absolutely reasonable and logical. While the cons are connected rather with a bad assessment of a real situation, therefore, it is always recommended to consult a financial advisor or even a specialized broker. These specialists will check the available variants and recommend the most suitable ones.
If you calculate all your expenses properly and check what is left, you can select the most suitable insurance plan.