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Best Term Life Insurance

May 2024

Term life insurance is an affordable way to protect your loved ones if something unexpected happens to you. But with so many options out there, it can be hard to know where to start. We've done the research and here is a list of some of the best term life insurance companies based on affordable rates, flexible coverage, and excellent customer service. We recommend you request rates from at least three of the following companies and see which one offers the best life insurance quote.
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What is term life insurance?

Term life insurance is a type of life insurance policy that provides coverage for a specified term, usually between 10 and 30 years. If the policyholder dies during the term, their beneficiaries receive a death benefit.

How to find the best term life insurance companies?

Life insurance is an important investment that can provide peace of mind for you and your loved ones. But with so many options available, it can be difficult to know which term life insurance company to choose. Here are some tips for finding the best term life insurance companies to meet your needs.
  1. Evaluate financial strength: Before choosing a term life insurance company, it's important to evaluate its financial strength. You want to choose a company that will be able to pay out your death benefit if the need arises. SuperMoney's financial rating combines ratings from multiple rating agencies that evaluate the financial stability of life insurance companies.
  2. Compare rates: The cost of term life insurance can vary significantly from one company to the next. Be sure to get quotes from multiple companies so you can compare rates and find the best deal. This can be done by requesting quotes from companies or by using an online insurance marketplace.
  3. Read reviews: Reading reviews from other policyholders can provide valuable insight into a term life insurance company's customer service, claims handling, and overall satisfaction. Look for reviews on the company's website, as well as on third-party websites like Yelp and the Better Business Bureau.
  4. Consider policy features: Some term life insurance companies offer additional features like accelerated death benefits or the ability to convert your policy to a permanent policy. Consider which features are most important to you when comparing companies.
When it comes to choosing the best term life insurance company, it's important to do your research and carefully consider all of your options. By evaluating financial strength, comparing rates, reading reviews, and analyzing policy features you can find the right policy to meet your needs and provide peace of mind for you and your loved ones.

Do you need term life insurance coverage?

Ultimately, the decision of whether or not to get term life insurance coverage depends on each individual's personal circumstances and financial situation. However, the statistics suggest that many households can benefit from having term life insurance coverage to provide financial protection for their loved ones in the event of an unexpected death.
According to a survey conducted by LIMRA, an association of financial services and insurance companies, 46% of American households are underinsured and more than one-third of all households would have immediate trouble paying living expenses if the primary wage earner were to die. These statistics suggest that term life insurance coverage is important for many people, especially those with dependents or loved ones who would be financially impacted by their death.
Furthermore, a report from the National Bureau of Economic Research found that households without life insurance have lower levels of savings and higher levels of credit card debt compared to those with life insurance. This suggests that having term life insurance coverage can help provide a safety net for households and reduce the risk of financial hardship in the event of an unexpected death.
It's also worth noting that term life insurance coverage can be relatively affordable. For example, a healthy 35-year-old can get a 20-year term life insurance policy with a $500,000 death benefit for as little as $20 per month.

How much term life insurance coverage do I need?

The amount of coverage you need depends on your individual circumstances, including your income, debt, and financial obligations. Here are three useful rules of thumb to determine how much life insurance you need:
  1. Income replacement: A common rule of thumb is to have life insurance coverage that's equal to 10-12 times your annual income. This will help ensure that your loved ones can maintain their standard of living if you were to pass away.
  2. Debt and expenses: Another approach is to calculate your total debt, including mortgage, car loans, and credit card debt, and add it to your annual expenses. This will give you a sense of how much coverage you need to pay off your debts and cover your family's expenses for a specified period of time, such as 10-20 years.
  3. DIME formula: The DIME formula is a simple way to estimate how much life insurance coverage you need. DIME stands for debt, income, mortgage, and education. Add up all of your debt, determine how much income you need to replace, estimate the cost of your mortgage, and add the estimated cost of your children's education. This will give you a rough estimate of how much coverage you need.
While these rules of thumb can help determine how much life insurance coverage you need, it's important to remember that everyone's situation is unique.

FAQs about life term insurance

How does term life insurance differ from permanent life insurance?

Term life insurance is temporary and provides coverage for a specific term, while permanent life insurance provides coverage for the policyholder's entire life.

What factors impact the cost of term life insurance?

The cost of term life insurance is based on factors such as the policyholder's age, health, and lifestyle habits, as well as the amount of coverage and length of the term.

Can I convert my term life insurance policy to a permanent policy?

Some term life insurance policies offer the option to convert to a permanent policy, but this varies by insurer and policy. It's best to check with your insurance provider for details.

What happens if I outlive my term life insurance policy?

If the policyholder outlives the term of the policy, the coverage expires, and no death benefit is paid. However, some policies may offer the option to renew or convert to a new policy.

Do I need a medical exam to get term life insurance?

Not necessarily. Although most term life insurance policies require a medical exam, there are some providers that offer no-exam policies.

Can I name multiple beneficiaries on my term life insurance policy?

Yes, policyholders can name multiple beneficiaries and determine how the death benefit is distributed among them.
Can I cancel my term life insurance policy? Yes, policyholders can typically cancel their term life insurance policy at any time, but may incur fees or penalties. The best term life insurance companies allow you to cancel your policy within 30 days without a penalty.

Can I purchase term life insurance online?

Yes, many insurance providers offer the option to purchase term life insurance online, either directly through their website or through a third-party insurance marketplace. The list above is a great place to start if you want to compare rates.

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