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What is the best life insurance?

Finding the best life insurance means NOT wasting money!

The best life insurance is the insurance that provides you with peace of mind and the coverage that you need at an affordable rate.

This may seem like a rather generic answer, but the truth is that there are a lot of good insurance companies available and several different types of life insurance to choose from, making it possible for you to tailor your life insurance policy to your specific needs.

There is no single policy that is best for everyone. Learning the difference can make all the difference.

Doing your homework is critical to finding the best life insurance rates and the best life insurance company. Enter your zip code above to begin comparing free online insurance quotes!

Term Life versus Whole Life Insurance

When you purchase life insurance, you have two major options, term life insurance and whole life insurance. Term life insurance offers you life insurance at specified intervals.

Most policies can be purchased in 5 year, 10 year, 15 year, 20 year and 30 year increments depending on your age. There are annually renewable policies that offer coverage in one year intervals as well. The benefit to a renewable policy is that it renews without requiring further physicals or health questions, they are guaranteed year after year, although the premiums will increase each year.

Term life is an affordable life insurance choice and is often purchased by individuals who cannot meet the stringent health requirements for a whole life policy or cannot afford the higher premiums of a whole life policy. In addition, you can purchase high coverage amounts at lower premiums when you purchase a term life policy. This makes it very appealing to people who have kids, a large mortgage or will leave behind a lot of debt when they die.

Purchasing Both Policies

There are those individuals who purchase both policy types and own a small whole life policy in addition to a term life policy. Take this scenario, for example. Jane has two kids ages 5 and 7. As a single parent, she is concerned about what will happen to her kids, their college education, and the house and so on if she dies unexpectedly.

She makes a decision to purchase term life insurance with a 20 year cap, which means her children will be 25 and 27 when the policy expires. She purchases a $500,000 policy, which will pay off the mortgage and ensure her children have money to go to college if she should die before they become adults.

In the meantime, Jane wants to take advantage of the fact that she is young and a whole life policy is more affordable if purchased at a young age. She decides to purchase a $20,000 policy with a maximum premium cap to ensure that the premiums don’t become too expensive if she lives long enough to be considered elderly.

This policy will have cash equity in a few years, which she can borrow against, if necessary, or simply leave a small inheritance for her children.

In any case, many people choose a term life policy simply because they can get more for less, so to speak, which allows them to provide a high monetary benefit to their families should they die unexpectedly at a young age. The older you become the more expensive term life policies become. In addition, some insurance companies will not sell term life to individuals over a certain age (this age cap will vary) because of their increased health risks.

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Whole Life Insurance

Whole life insurance lasts for the lifetime of the insured so long as the premiums are paid. Once an insurance company approves you for a whole life insurance policy they cannot cancel it unless you stop paying the premiums or if they can prove that you lied on your application about any health issues, family history, etc.

The insurance company is bound to pay the full benefit of the whole life policy regardless of how soon you die after you purchase the policy. The exception to this rule is if the insured person commits suicide or dies from a known condition that they deliberately excluded from the insurance application.

After several years, a whole life policy has cash value and you, as the policy owner, can borrow money against the policy or ask for part of the benefit to be paid even though the insured person is still living. This amount will be deducted from the total benefit amount when the insured person dies.

Whole life insurance policies are much more expensive than term life and the health requirements are more stringent. However, the biggest benefit to a whole life policy is that it doesn’t expire. When you purchase term life, if you survive through the life of the policy then you don’t get any money from that policy at all. You can’t cash out on the policy and the insurance company simply keeps the premiums without having to pay a benefit, it is a win/win for them.

With a whole life policy, unless the beneficiary dies, the insurance company has to pay. If the beneficiary doesn’t come forward the insurance company is required to send the benefit amount to a state fund of ‘lost’ money waiting for someone to claim it, so the insurance company isn’t allowed to keep it. A whole life policy is more of an investment; a guaranteed investment.

Choosing the Best Life Insurance Options

If you aren’t sure which option to choose, consider your current financial situation as well as what your obligations are. If you have small children you might want to consider a combo term and whole life option to ensure that you have the large amounts of money available to provide for them in case of your untimely death.

If you want to lock in affordable premiums on a lifetime policy, then you may want to consider a whole life policy. In addition, if you don’t like the idea of paying for an insurance policy that may never have to pay the benefit to the beneficiaries, then a whole life option may be the best for you as well.

The truth is that only you can decide which option offers you the most benefit.

Choosing the Best Life Insurance Company

As mentioned earlier, there are many excellent choices available for people who want to purchase life insurance. In order to ensure that you choose the right company you need to consider a couple of things. First, are they a stable company? You can check A.M. Best or other insurance rating companies to determine how the company is doing financially. In addition, you can use online forums, the Better Business Bureau and your state’s Department of Insurance to find complaints, concerns and even compliments about insurance companies.

You will also want to find out what customers think about their insurance companies. You can do searches online to find out if companies are considered difficult to work with, if they take a long time to pay life insurance benefits, if their rates increase to quickly as you age and so on.

Lastly, use a free quote tool to learn which insurance companies are offering the best rates. It is easy to use and you can check both term and whole life options. You will only get quotes from stable companies, making it easier for you to make a decision.

Try using the free life insurance quote tool today by entering your zip code!

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