Choosing the Best Life Insurance Company

Before diving in and purchasing life insurance, it is vital to understand exactly what features to look for when comparing the best life insurance companies. There are various types of life insurance that are designed to fit a wide variety of needs. Moreover, some providers offer customizable policies with added provisions known as “riders,” which can add valuable benefits.

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Types of Life Insurance

If you are scratching your head wondering, “What is life insurance?" Don't worry. It's not as complicated as it sounds. Life insurance ensures that your spouse and children — or any other individuals who rely on your financial support — are covered in the case you die prematurely.

There are two main types of life insurance: Whole Life and Term Life. Term life insurance policies provide protection for fixed periods of time. For example, 10-, 20- and 30-year term policies at guaranteed rates. Whole life insurance has higher monthly premiums and covers you for the extent of your life or until age 120, whichever comes first.

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Why Choose Term Life Insurance?

Because of its temporary nature, term life insurance policies can provide a substantial amount of coverage at a much lower cost than whole life insurance, especially for younger people.

Term life insurance is often popular among young families because parents typically need more coverage while kids are still living at home. Once your kids grow up and move out, the amount of insurance you need is typically lower since your children are less likely to depend on you financially.

Here are some other good reasons why people consider purchasing term life insurance:

• If you pay a mortgage
• If your spouse would not be able to replace your salary
• If your children need college funding
• If an aging parent or disabled family member relies on your finances or care
• To pay off student loans or other large loans (cosigned loans still need to be repaid)
• To cover funeral costs
• To leave money behind to your loved ones in times of uncertainty and grief

When you are in your 50s and 60s, you don't have to worry about leaving behind your partner with small children and a costly mortgage. So, while term life insurance does not gain cash value, it is also very affordable. 

Don’t Just Rely on Group or Employer Life Insurance

But what about life insurance provided by an employer? If your company offers free life insurance, then sign up for this free benefit — but don't stop there. Many companies offer their employees a certain amount of insurance for free, but this is usually not enough.

Usually, you can purchase supplemental insurance through your company's benefits, but this insurance does not travel with you if you move jobs — unless your company allows you to pay an expensive premium price to take your policy with you. So, if you want to fill in any gaps in coverage and make sure you can take that coverage with you if you change jobs, an individual term life policy might be worth checking out.

How Much Coverage Do I Need?

It can be daunting to figure this out but evaluate your current financial situation today, and what foreseeable expenses will need to be covered 10 to 20 years down the road. 

When deciding how much coverage to purchase, ask yourself these questions:

• How long do I need coverage? If you just got married and are starting a family, you will need at least 20 years of coverage to ensure that your children are provided for until graduation.
• How much can I afford? Find the balance between buying enough coverage and having a monthly premium that fits in your budget. The more coverage you purchase, the more expensive your premium (the amount you pay) will be.
• What will my family need if I pass away today? If something were to happen to you today, there would be a lot of financial expenses placed on your family's shoulders. 

Whether you choose term or whole life insurance depends on your current and future financial needs. Either one is essential to have, especially if you have loved ones who rely on you for financial stability. 

Underwriting 

The underwriting process when applying for term life insurance can be significantly longer and more involved than other types of insurance. This is because companies take greater care—for example, medical examinations—to limit their exposure to risk, due to the level of funding that goes into death benefits. 

Getting the right life insurance policy can give you and your family peace of mind should your circumstances take a turn for the worse. As this is a very important decision that could affect the future of your family, it’s important to compare all the best life insurance companies available and choose the one that best suits your needs.

Disclaimer

*AM Best Rating: A.M. Best's Financial Strength Rating (FSR) is a measure of an insurer's financial strength and ability to pay out claims to policyholders. An "A" rating with A.M. Best indicates that an insurer is considered to be top of the industry in ability to meet ongoing insurance obligations.

*Ethos: Life insurance without an exam requires a few online health questions.

¹Eligibility for Progressive Life Insurance depends on age, health, and additional underwriting factors. The exact policy type, coverage amount, and term length offered will vary.

Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers – for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products. Coverage amounts vary by state.