The Best Term Life Insurance Policy: To achieve peace of mind and live a fulfilling life, getting term life insurance is a crucial step. It can simplify your life by providing the security you need.
In this post, I’ll explain everything you need to know about term life insurance, including where to buy it. I’ll show you options that are risk-free, affordable, and have the potential to grow over time.
Understanding Term Life Insurance
Term life insurance allows you to choose a term length, starting typically at five years. During this period, your rates remain unchanged. Popular term lengths include 10, 15, 25, and 30 years.
Once the term expires, you can usually renew the policy annually (up to a certain age), but the rates will likely increase each time. Therefore, it’s important to select the right term length when you first buy the policy.
You also choose your coverage amount, which can be as high as millions of dollars. When you purchase the policy, you must name at least one beneficiary. If you pass away while the policy is active, your beneficiary will receive a death benefit.
If your coverage expires while you’re still alive (unless it includes a “return of premium” provision), you won’t get any refund.
Term life insurance is more affordable than other types of life insurance, such as whole life insurance. It’s cheaper because it doesn’t have a cash value. Unlike cash value life insurance, you can’t borrow against or withdraw money from a term life insurance policy.
Who Should Buy Term Life Insurance?
Consider buying term life insurance if you want to ensure financial security for your loved ones. It’s ideal for those looking for the most cost-effective life insurance and who need coverage for a specific period, such as the duration of a mortgage or their working years.
We reviewed rates and benefits from 26 companies to identify the best term life insurance providers.
Term life insurance provides a payout for the term you choose, usually 10, 20, or 30 years. When the term ends, you have three options: renew the policy, convert it to a permanent policy, or let it expire.
The main purpose of term life insurance is to support your dependents financially, including spouses, children, siblings, and parents. It helps cover expenses like burial costs, unpaid debts, and other financial needs.
Best Term Life Insurance Providers
Haven Life
Haven Life is our top pick for term life insurance. Some applicants can skip the medical exam, but coverage without an exam is capped at $1 million. For higher coverage, a medical exam is required.
A downside is that you can’t convert a term life policy to a whole life policy with Haven Life. However, you might be able to purchase new whole life coverage after the term ends.
Depending on your location, you might get Haven Life Plus at no extra charge. This includes a free online will, a digital safe for important documents, and a membership to the Adaptiv fitness program.
Haven Life, a digital insurance company, doesn’t issue its own products. Instead, policies are managed by MassMutual or its subsidiaries.
Ladder
Ladder offers flexible term life insurance. You can adjust your coverage as your needs change, with premiums starting at just $5 per month.
Ladder is ideal for young applicants seeking affordable insurance. The company uses a simple three-step online application process, and you can cancel your coverage anytime without penalties.
Ladder allows policyholders to adjust their coverage level online at any time, with corresponding changes in premiums. This flexibility helps maintain an affordable policy, especially if your financial situation changes.
New York Life
New York Life offers both term and permanent life insurance policies. Their term insurance policies include a conversion option if you decide you want permanent coverage later. They also finance the AARP life insurance plan.
New York Life is great for those seeking permanent life insurance. Permanent policies cost more but build cash value and provide a death benefit. Options include universal and variable life insurance plans, and you can add riders for additional coverage.
New York Life is one of the oldest insurance providers, with policies issued since 1845, and has a strong AM Best rating.
You can choose between Level Premium Convertible, Yearly Convertible, and Million Plus Term policies, each with rider options like a spouse’s paid-up rider, a disability waiver of premium, and a living benefits option. While you can convert term policies to whole life insurance, a conversion fee may apply.
As a mutual insurance company, New York Life is owned by its policyholders, who may receive dividends based on the policy type.
Northwestern Mutual
Northwestern Mutual offers a variety of life insurance products, including term, whole, universal, and variable life insurance. They stand out for the many optional riders available to customize your policy.
Like Haven Life, Northwestern Mutual is a mutual company that distributes dividends to policyholders. You might qualify for annual dividend payments if you purchase insurance from them.
Northwestern Mutual is highly reputable, frequently ranking first in its sector. It received third place in the J.D. Power 2021 U.S. Individual Life Insurance Study and has fewer complaints than expected for a company of its size.
John Hancock
John Hancock, based in Boston, has been operating for about 160 years and holds an A+ rating from AM Best. They offer online quotes, and some applicants can skip the medical exam. Coverage options range from $750,000 to 30 years.
The Vitality Plus wellness program offers discounts and benefits like free access to the Headspace meditation app and grocery discounts. You can also convert a term policy to a whole life policy without a medical exam.
If the insured passes away within the policy term, beneficiaries receive a death benefit. After the term ends, you can renew the policy or convert it to a permanent policy, but premiums may increase.
Term life insurance policies don’t have a savings component like whole life insurance. You have various coverage options and add-ons to choose from.
Conclusion on The Best Term Life Insurance Policy
This post highlighted the benefits of term life insurance and recommended some top providers. You should still do personal research to find the best fit for your needs.