Life insurance: term, whole life and no-exam policies
Life insurance pays a sum to the people you name if you die while the policy is active. The main choice is between cover for a set period and cover for life.
Term life
Term life covers a fixed number of years, often 10, 20 or 30. If you die within the term, your beneficiaries receive the payout. It is the cheapest way to buy a large amount of cover and suits needs that end, such as a mortgage or children growing up.
Permanent life
Whole life and universal life last for your lifetime and build a cash value. Premiums are much higher than term for the same payout. They are mainly used for estate planning or when cover is needed for life.
Final expense insurance
Small permanent policies designed to cover funeral and end-of-life costs. They are often easier to qualify for, especially for older applicants.
No medical exam policies
Some insurers approve applications using health questions and data checks instead of a medical exam. Approval is faster, but prices can be higher and coverage amounts lower than fully underwritten policies.
How much cover
A common starting point is to add up debts, future costs such as education, and several years of income your family would need, then subtract savings and existing cover. A licensed agent or financial planner can help with your specific situation.
Before you buy
Compare quotes for the same term and amount, check the insurer’s financial strength rating, and read the exclusions and any waiting period carefully.