Life Insurance

Compare life insurance policies from many trustworthy insurers right here today with zaving

Last updated by Zaving Editorial Team, on May 15th, 2024

Life insurance is a crucial tool for securing your family's financial future and providing them with peace of mind in times of uncertainty. At zavings, we understand the importance of protecting your loved ones in the event of unexpected circumstances. By comparing a comprehensive range of life insurance options, we empower you to make informed decisions and find the perfect policy for your unique needs.

Whether you're looking for term life insurance, whole life insurance, or other coverage options, our comparison service offers a quick and easy way to compare multiple policies all in one place. With zavings, you can instantly compare quotes, explore policy features, and find the right coverage that fits your budget. Safeguard your loved ones' future today with zavings and ensure they are well taken care of no matter what lies ahead in the future. Start your journey towards comprehensive life insurance coverage with zavings today!

What is life insurance and how does it work? 

Life insurance is a financial product designed to provide a payout to your beneficiaries upon your death. It offers peace of mind by ensuring that your loved ones are protected financially in the event of your passing. Life insurance works on the principle of risk pooling, where a large group of individuals pays premiums to an insurance company, which then uses those funds to provide benefits to the beneficiaries of policyholders who pass away.

Understanding Life Insurance

Life insurance is a contract between you (the insured) and the insurance company. You agree to pay regular premiums, either monthly or annually, and in exchange, the insurance company promises to pay a death benefit to your chosen beneficiaries when you die. The death benefit is the amount of money that is paid out and is determined by the coverage amount you select at the time of purchasing the policy.

Why Life Insurance is Important

Life insurance is essential for several reasons. Firstly, it provides financial security for your loved ones, ensuring they are protected from potential financial hardships in the event of your death. The death benefit can be used to cover funeral expenses, outstanding debts, mortgage payments, and ongoing living expenses.

Additionally, life insurance can be used as an estate planning tool to leave a legacy or provide an inheritance for your beneficiaries. It can also be used to replace your income and support your family's financial needs, such as college tuition for your children or spousal support.

Life insurance is a crucial component of financial planning, providing protection and financial security to your loved ones. It is important to carefully assess your needs, consider your financial goals, and consult with a life insurance professional to determine the most suitable policy for your specific circumstances.

How much life insurance coverage do I need? 

Determining the right amount of life insurance coverage depends on various factors, including your financial situation, family's needs, and future obligations. It's crucial to ensure that your life insurance policy provides sufficient funds to cover your beneficiaries' financial needs and any outstanding debts or expenses that may arise.

Assessing Your Financial Needs To determine the appropriate coverage amount, consider the following factors:

  1. Income Replacement: Calculate how much income your loved ones would need to maintain their current standard of living if you were no longer there to provide for them. Consider the number of years they would need financial support until they become self-sufficient.
  2. Debts and Liabilities: Take into account any outstanding debts, such as mortgages, car loans, student loans, or credit card debts. Your life insurance coverage should be sufficient to pay off these obligations and prevent them from burdening your loved ones.
  3. Education Expenses: If you have children, factor in the cost of their education, including tuition fees, books, and other educational expenses. This ensures that they have the financial means to pursue their academic goals.
  4. Final Expenses: Consider funeral and burial costs, as well as any medical bills or estate settlement expenses that may arise after your passing.
  5. Future Goals: Think about any future goals you want to provide for, such as leaving an inheritance, starting a business, or supporting charitable causes. These goals can influence the coverage amount you choose.

Keep in mind that life insurance needs may change over time as your financial situation evolves. Regularly reviewing your coverage with zavings and adjusting it as necessary ensures that your policy continues to meet your family's financial needs.

What are the different types of life insurance policies?    

Life insurance policies can be broadly categorized into two main types: term life insurance and permanent life insurance. Let's explore each type in more detail:

1. Term Life Insurance: Term life insurance provides coverage for a specific period, usually 10, 20, or 30 years. It offers a death benefit if you pass away during the term of the policy. Term life insurance is known for its affordability and simplicity. It's often chosen by individuals who need coverage for a specific period, such as during their working years or until their mortgage is paid off.

2. Permanent Life Insurance: Permanent life insurance is designed to provide coverage for your entire lifetime, as long as premiums are paid. It includes policies such as whole life insurance, universal life insurance, and variable life insurance. Permanent life insurance not only offers a death benefit but also accumulates cash value over time. This cash value can be accessed during your lifetime through withdrawals or policy loans.

  • Whole Life Insurance: Provides a guaranteed death benefit and builds cash value over time. Premiums remain level throughout the life of the policy.
  • Universal Life Insurance: Offers flexibility in premium payments and death benefit amounts. It also accumulates cash value based on the policy's performance.
  • Variable Life Insurance: Allows policyholders to invest the cash value component in various investment options, such as stocks and bonds. The cash value and death benefit can fluctuate based on the performance of the investments.

Each type of life insurance has its own benefits and considerations. It's important to evaluate your financial goals, budget, and long-term needs to determine which type of policy aligns best with your objectives.

What is the average cost of life insurance in the USA?

The cost of life insurance in the USA can vary based on several factors, including:

  • the type of policy,
  • coverage amount,
  • the age and health of the insured
  • the duration of the policy.

Here are some general ballpark figures regarding the average cost of life insurance:

  1. Term Life Insurance: Term life insurance is generally more affordable compared to permanent life insurance. The cost of term life insurance depends on factors such as age, gender, health, and the length of the term. On average, for a healthy individual, term life insurance can range from $20 to $100 per month for coverage amounts between $250,000 and $1 million.
  2. Whole Life Insurance: Whole life insurance tends to have higher premiums due to its lifelong coverage and cash value component. The cost of whole life insurance varies based on factors such as age, gender, health, and the coverage amount. Premiums for whole life insurance can range from $100 to several hundred dollars per month.
  3. Other Factors: The cost of life insurance may also be influenced by additional factors, including the applicant's occupation, lifestyle choices (such as tobacco use), and any pre-existing medical conditions.

It's important to note that these figures are general estimates, and the actual cost of life insurance can vary significantly based on individual circumstances and insurance providers. To get an accurate idea of the cost, it is recommended to request quotes from multiple insurance companies through zaving so you are able to compare policies side by side.

Remember, life insurance is a valuable financial tool that can provide financial protection and peace of mind for your loved ones. It is worth considering the long-term benefits it can offer, even if the premiums may seem higher initially.

How does term life insurance differ from whole life insurance?  

Term Life Insurance:

Term life insurance provides coverage for a specific period, typically 10, 20, or 30 years. It offers a death benefit to the beneficiaries if the policyholder passes away during the term. Here are some key differences between term life insurance and whole life insurance:

  • Coverage Duration: Term life insurance provides coverage for a fixed term, whereas whole life insurance offers coverage for the policyholder's entire life.
  • Premiums: Term life insurance generally has lower premiums compared to whole life insurance. The premiums for term policies are calculated based on the coverage amount and the duration of the term. The premium remains level throughout the term but may increase upon renewal.
  • Cash Value Accumulation: Term life insurance policies do not accumulate cash value over time. They focus solely on providing a death benefit. The policy expires at the end of the term, and if the policyholder outlives the term, no benefits are paid.

Whole Life Insurance:

Whole life insurance is a type of permanent life insurance that offers coverage for the entire lifetime of the policyholder. Here are some key characteristics of whole life insurance:

  • Coverage Duration: Whole life insurance provides coverage for the policyholder's entire life, as long as premiums are paid.
  • Premiums: Whole life insurance generally has higher premiums compared to term life insurance. The premiums are calculated based on the coverage amount, the policyholder's age, and other factors. Premiums for whole life insurance remain level throughout the life of the policy.
  • Cash Value Accumulation: Whole life insurance policies accumulate cash value over time. A portion of the premiums paid goes towards the cash value, which grows on a tax-deferred basis. Policyholders can borrow against the cash value or use it to supplement retirement income.

Is life insurance necessary if I have no dependents? 

Life insurance can still be relevant and beneficial even if you have no dependents. While the primary purpose of life insurance is to provide financial support to your loved ones in the event of your passing, there are other reasons why it may be worth considering, regardless of your dependent status. Here are a few points to consider:

Covering Funeral Expenses:

Funeral and burial costs can be significant, and life insurance can help cover these expenses, relieving your family of the financial burden during a difficult time.

Debts and Financial Obligations:

If you have any outstanding debts, such as a mortgage, car loan, or student loans, life insurance can help ensure that these financial obligations are taken care of, preventing them from becoming a burden for your loved ones.

Legacy and Charitable Contributions:

Life insurance proceeds can be designated for specific purposes, such as leaving a financial legacy for future generations or making charitable donations to causes that are important to you.

Future Insurability:

Purchasing life insurance when you're young and healthy allows you to lock in lower premiums and secure coverage for the future. If you anticipate having dependents or financial responsibilities in the future, having a life insurance policy in place can be a strategic decision.

Business or Partnership Obligations:

If you own a business or have a partner, life insurance can be essential in ensuring the continuity and financial stability of the business in case of your unexpected passing.

Ultimately, the necessity of life insurance without dependents depends on your individual circumstances and financial goals. It's recommended to assess your current and future financial obligations, evaluate the potential benefits of life insurance, and consult with a qualified insurance professional who can provide personalized advice based on your specific situation.

Can I buy life insurance for someone else?  

Yes, it is possible to purchase life insurance for someone else, but there are certain conditions and considerations to keep in mind. Here are some key points to know:

  1. Insurable Interest: In most cases, you must have an insurable interest in the person you want to insure. This means you must demonstrate a financial interest or relationship with them, such as being a family member, spouse, or business partner.
  2. Consent and Collaboration: You typically need the consent and cooperation of the person you want to insure. They may need to undergo a medical examination or provide information about their health and lifestyle.
  3. Ownership and Beneficiary: As the policyholder, you have control over the life insurance policy, including the ability to select the coverage amount, pay premiums, and make changes. However, the insured person's consent is usually required to purchase the policy and designate them as the insured.
  4. Purpose and Responsibility: The purpose of buying life insurance for someone else can vary. It could be to protect their financial well-being, cover potential liabilities, or ensure business continuity. As the policy owner, you are responsible for paying the premiums and managing the policy.
  5. Legal and Ethical Considerations: Buying life insurance for someone else should be done with their full knowledge and understanding. It's important to have open communication and disclose all relevant information to the insurance provider to avoid any legal or ethical complications.

When purchasing life insurance for someone else, it's crucial to consult with an experienced insurance professional who can guide you through the process, explain the legal and ethical aspects, and help you select the right policy based on your specific needs and circumstances.

Can I get life insurance if I have a pre-existing health condition?

Yes, it is possible to obtain life insurance even if you have a pre-existing health condition. However, the availability and terms of coverage may vary depending on the specific condition and its impact on your overall health. Here are some key points to consider:

  • Underwriting Process: When you apply for life insurance, the insurance company will assess your risk profile through a process called underwriting. This involves reviewing your medical history, current health status, and any pre-existing conditions. The insurer will evaluate the severity and stability of your condition to determine the level of risk involved.
  • Medical Examination: In some cases, the insurance company may require you to undergo a medical examination to gather more information about your health. The examination may include tests, measurements, and evaluations of your overall health and specific condition.
  • Impact on Premiums: Having a pre-existing health condition may affect the cost of your life insurance premiums. The insurance company may charge higher premiums to account for the increased risk associated with the condition. The specific impact on premiums will depend on factors such as the severity of the condition, treatment history, and overall health.
  • Alternative Options: If you have a severe or high-risk pre-existing condition, traditional life insurance policies may be challenging to obtain or may come with higher premiums. In such cases, you may explore alternative options like guaranteed issue life insurance or simplified issue life insurance, which have fewer medical underwriting requirements but may have certain limitations and higher premiums.

Remember, each insurance company has its own underwriting guidelines and policies, so it is essential to shop around and compare multiple options with zavings to find the best coverage and rates that suit your specific needs and health condition.

More of your frequently asked questions about life insurance

Does life insurance cover accidental death?

Yes, life insurance policies typically cover accidental death. However, it's important to review the policy terms and conditions to understand the specific coverage details related to accidental death. Some policies may have certain exclusions or limitations, so it's crucial to read the policy documents or consult with your insurance provider to clarify the coverage.

Are there age restrictions for purchasing life insurance?

There are generally no age restrictions for purchasing life insurance. However, the availability and cost of coverage may vary based on your age. Younger individuals may typically find it easier and more affordable to obtain life insurance, while older individuals may have limited options or higher premiums. It's advisable to explore your options and work with an insurance professional to find suitable coverage based on your age and specific needs.

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

Many term life insurance policies offer a conversion option that allows you to convert the policy into a permanent life insurance policy without undergoing a medical exam or providing additional evidence of insurability. The conversion option typically has a specific conversion period, during which you can exercise this feature. Converting to a permanent policy can provide lifelong coverage and potential cash value accumulation.

What is the cash value of a life insurance policy?

The cash value is a feature of certain types of permanent life insurance policies, such as whole life or universal life insurance. It represents the savings component of the policy, which grows over time through contributions and interest. The policyholder can access this cash value through policy loans or withdrawals, providing a source of liquidity or potential for wealth accumulation.

Are life insurance proceeds taxable?

In general, life insurance proceeds are not taxable as income for the beneficiary. The death benefit paid out to the beneficiary is typically income tax-free. However, there may be exceptions and specific situations where some portion of the death benefit could be subject to estate tax or other tax obligations. It's recommended to consult with a tax advisor or financial professional for guidance specific to your circumstances.

Can I change beneficiaries on my life insurance policy?

Yes, you can generally change the beneficiaries on your life insurance policy. Most insurance companies provide a beneficiary change form that you can fill out to update the beneficiaries. It's important to keep your life insurance provider informed about any changes to ensure that the policy reflects your desired beneficiaries.

How do I file a life insurance claim?

To file a life insurance claim, you need to notify the insurance company as soon as possible after the insured person's death. The insurance company will provide you with the necessary claim forms and documentation requirements. You will typically need to submit a copy of the death certificate and complete the claim form, providing information about the policy, the insured person, and the beneficiaries. It's important to carefully follow the instructions provided by the insurance company to ensure a smooth claims process. You can reach out to the insurance company's customer service or claims department for guidance and support throughout the claim filing process.

What is the contestability period in life insurance?

The contestability period is a specific timeframe, usually the first two years of a life insurance policy, during which the insurance company has the right to investigate and review the policy application and statements made by the insured. If any misrepresentations or material omissions are discovered during this period, the insurance company may have the option to contest the claim or make adjustments to the policy. Once the contestability period ends, the insurance company generally cannot deny a claim based on misrepresentations made in the application.

Can I get life insurance without a medical exam?

Yes, it is possible to obtain life insurance without undergoing a medical exam. There are insurance companies that offer “no medical exam” or “simplified issue” life insurance policies. These policies typically involve a simplified underwriting process that may require answering health-related questions or undergoing a telephone or online interview. While these policies can provide a faster and more convenient application process, they may have certain limitations, such as lower coverage amounts or higher premiums compared to policies that require a medical exam.

Is life insurance a good investment?

Life insurance primarily serves as a financial protection tool to provide a death benefit to beneficiaries in the event of the insured person's death. While certain types of life insurance policies, such as whole life or universal life insurance, have a cash value component that can grow over time, they are not generally considered as standalone investment vehicles. If your primary goal is investment growth, there may be other investment options more suited to your needs. It's important to carefully consider your financial goals and consult with a financial advisor to determine the most appropriate investment strategies for your specific situation.

What is the grace period for life insurance premium payments?

The grace period is a specific period of time after the premium due date during which the life insurance policy remains in force, even if the premium payment has not been made. The grace period can vary depending on the insurance company and policy terms, but it is typically 30 days. During the grace period, the policyholder has the opportunity to make the premium payment without any lapse in coverage. However, if the payment is not made within the grace period, the policy may lapse, and the coverage will be terminated.

Can I cancel my life insurance policy if I no longer need it?

Yes, you can generally cancel your life insurance policy if you no longer need it. The process for canceling a life insurance policy may vary depending on the insurance company and policy terms. In most cases, you will need to submit a written request to the insurance company to cancel the policy. It's important to be aware of any potential surrender charges or fees that may apply when canceling a policy. Before canceling a policy, carefully evaluate your financial needs and consult with a financial advisor to understand the potential implications and explore alternative options.