What is a rider? Should I add one to my policy?

A rider is an optional feature that you can add to a standard policy. They can be especially useful to folks who need personalized coverage for a specific need. A chronic illness rider, for example, provides the insured with a portion of their death benefit if they're diagnosed with a terminal illness. A disability rider waives or reduces the monthly premium if the policyholder becomes incapacitated.

Should I buy life insurance?

If anyone relies on you for financial support -- children, spouse or parent -- you should have life insurance. Many people buy a policy around the time of a major life milestone. When you take on debt to buy a house or send a child to college, a policy can help ensure that your obligations are paid even if you die. A life insurance policy can also help your dependents manage living expenses as well as include final expense insurance for burial and funeral costs.

I have health problems or preexisting conditions. How should I shop for insurance?

It's worth shopping around to see if any life insurer offers a policy designed for your specific situation. Health insurance companies generally classify clients in one of four categories: Preferred Best (sometimes called "Super Preferred"), Second Best Preferred (or simply "Preferred"), Standard Plus and Standard. Current or recent smokers are classified as either Preferred Smoker or Standard Smoker. Each insurance company has its own approach to classifying customers; some may categorize you as a smoker even if you quit three years ago. Your categorization will help determine your life insurance coverage premium. After you complete an application and a medical exam, you'll be able to see what policies are available to you. If you're having trouble finding a company that will write you the life insurance policy you want, you may want to consider guaranteed issue life insurance, which does not require a medical exam. However, it will come with a low death benefit and high premiums.

How should I choose a coverage amount?

There are a few ways to find an appropriate coverage amount. An "income replacement" strategy provides your family with a payout that's sufficient to support them for 15 to 20 years, through a combination of principal and interest. An appropriate amount of coverage is roughly 10 to 12 times your current annual income. Another option is "expense calculation," which correlates the size of the policy with your present and future financial obligations -- such as a mortgage or college tuition (which currently comes to around $175,000 on average for a private four-year institution). Both factors can help you when determining the size of your policy.

What should I do if my financial situation changes significantly?

Life is unpredictable, and when your financial situation changes, you'll need to reassess your insurance coverage. If you no longer need insurance, you can always cancel your policy. If your obligations increase significantly -- you take on a mortgage or have kids, for example -- you can always purchase additional insurance. Even though life insurance is designed for the long term, there are plenty of supplemental options for when circumstances change.

What if my coverage term expires before I die?

Despite the name, life insurance is really more income insurance. It ensures uninterrupted financial support for your family. Once your children can support themselves, your mortgage is paid off and you've saved enough to cover retirement, you'll have less need for life insurance.

Do life insurance policies pay dividends?

Some life insurance policies allow policyholders to earn dividends on their whole life insurance policies when the company does well.

Can you get life insurance if you have cancer?

Yes, typically those diagnosed with cancer can still get life insurance. If a person's cancer is in remission, they may be able to qualify for a term or whole life insurance policy. However, typically those with cancer may only have the option of getting a guaranteed issue life insurance policy. Guaranteed issue policies usually do not require a medical exam and accept most applicants. However, the death benefit is typically low -- around $25,000 -- and premiums are typically quite high.

I'm under 40 and in good health. Do I really need life insurance?

Yes. The best time to buy life insurance is when you're young and healthy, because it becomes more expensive as you get older.

How should I choose a life insurance term period?

You want a policy that covers the period of your greatest financial liabilities. If you're buying insurance today to ensure that you can pay college tuition for a 12-year-old child, for example, a 10-year policy would make sense. It's generally better to err on the side of a longer-term policy, since the cost and availability of products will change as you get older.

Should I buy a guaranteed life insurance policy?

For most people, the answer is no. Guaranteed life insurance policies are easy to get, even for older or less healthy people who may not need to take a medical exam. But the death benefit is typically very low and the premiums are high. Also, most guaranteed policies have a two-year waiting period: If you die during the first two years of coverage, the insurer will refund the cash value of the premiums you paid -- but not provide the death benefit.

Table of Contents

Best life insurance companies, compared
What is life insurance and how does it work?
Types of life insurance policies
How much does life insurance cost?
What does life insurance cover?
Who should get life insurance?
How to find the best life insurance policy and choose a carrier
FAQs
How we chose the best life insurance companies
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Article updated on Mar 9, 2023

Best Life Insurance Companies

Selecting the best life insurance policy can be a daunting task. Here's everything you need to know, plus our top picks.

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Our Picks

Principal Financial Group

Best overall life insurance

See at Principal View details
State Farm

Best for customer satisfaction

See at State Farm View details
Haven Life (MassMutual)

Cheapest and fastest coverage

See at Haven Life View details
Banner Life/Legal and General America

Best for longer term policies

See at Banner Life View details
Northwestern Mutual

Best for earning dividends

See at Northwestern Mutual View details