Comparing life insurance quotes online: Tips and tricks

What Is Life Insurance?

Life insurance is like a promise you make with a company that provides it. You agree to pay a certain amount of money regularly (called a premium) to keep your insurance active. In exchange, if something happens to you while the policy is in effect, the company will give a sum of money (called a death benefit) to the person you choose to receive it.

The amount of money your loved ones get when you’re gone depends on how much coverage you pick. You can choose a little bit to help cover funeral costs or a lot, even millions of dollars. You can also decide who gets the money, like family members or a charity.

The price you pay for life insurance (the premium) goes up based on how much coverage you want. Also, your age, gender, and health when you apply affect how much you pay. Once you buy life insurance, your price stays the same, even if your health changes later.

If you wait to get life insurance until you’re not feeling well, it can cost a lot more, or you might not even be able to get it at all.

Benefits of Life Insurance

Life insurance is like a safety net for your family if something happens to you. It gives them money to help with expenses after you’re gone. But it’s not just for after you’re gone – some types of life insurance can also give you money while you’re still alive if you get really sick.

The great thing about life insurance is that the people you choose to get the money can use it however they need to. And here’s another perk: usually, they don’t have to pay taxes on the money they receive. There are some rare cases where they might have to pay taxes, but most of the time, they get all of it tax-free.

Who Needs Life Insurance?

Life insurance is really important if there are people who count on you for money. Here are some reasons you might need it:

– If your family needs the money you make.
– If you have someone who depends on you for financial help, like a child with special needs.
– If you want to make sure your funeral costs are covered.
– If you want to leave money to your kids without having to save up a lot.

Types of Life Insurance

When it comes to life insurance, there are mainly two types: term life insurance and permanent life insurance. Each type has its own set of options and features to consider.

Term Life Insurance:

Term life insurance works like this:

– It covers you for a certain amount of time, usually between 5 to 30 years.
– You pay the same amount of money (called premiums) every month or year during that time.
– If something happens to you while the insurance is active, it gives money to the people you choose to get it.

Permanent Life Insurance:

Permanent life insurance is a bit different:

– It lasts your whole life, as long as you keep paying for it.
– Over time, it builds up some extra money (called cash value), which grows without you having to pay taxes on it right away.
– There are different types of permanent life insurance, like whole life, guaranteed issue, universal life, guaranteed universal life, indexed universal life, and variable universal life. Each type has its own special features and perks.

Comparison: Term Life vs. Permanent Life Insurance

Term life insurance Permanent life insurance
Locked in for the level term period, such as 20 years
Varies: Some types have a fixed premium, others can be varied
Cash value?
Are life insurance quotes typically lower or higher?
Guaranteed death benefit
Not always

Amy Danise

Amy Danise is the managing editor for and Forbes Advisor's insurance section, covering auto, home, renters, life, pet, travel, health, and small business insurance. With over 30 years in the insurance sector, she specializes in simplifying complex insurance topics into actionable information. Amy collaborates with her team to translate insurance jargon into clear language for consumers, helping them understand insurance costs and find top-rated companies. Leveraging her extensive industry contacts, she develops Forbes Advisor's insurance content and analyzes state regulatory filings for insights. Amy's expertise has earned her features in major news outlets like The New York Times and The Wall Street Journal. She holds a Bachelor's degree in American Studies from Wesleyan University.

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