- Lincoln Financial – Best for Boomers
- Mutual of Omaha – Best for Indexed Universal Life Insurance
- Pacific Life – Best for Retirement Planning
- Protective – Best for Universal Life Insurance
- Prudential – Best for Senior Life Insurance
- AIG – Best for Recreational Marijuana Use
- Equitable – Best for Variable Universal Life Insurance
- Nationwide – Best for Gen X & Millennials
- Northwestern Mutual – Best for Whole Life Insurance
- Penn Mutual – Best for Estate Planning
- Transamerica – Best for Term Life Insurance
- John Hancock – Best for Celebratory Cigar Use
How does life insurance work?
Policyholders pay premiums for a life insurance policy. If the policy is in effect when the person dies, the life insurance company pays a death benefit to beneficiaries. Death benefits are typically tax-free.
Beneficiaries can use the money in any way they want, so it’s a good idea for policyholders to choose trusted beneficiaries.
Which is better: term or whole life?
When it comes to term life vs. whole life insurance, the better choice depends on your specific goals. For example, if you’re looking for life insurance protection for only a certain number of years to cover a financial concern (such a mortgage), term life insurance is likely the best fit.
If you want lifelong coverage or to build cash value, look at forms of permanent life insurance such as whole life and universal life insurance.
What kinds of death are not covered by life insurance?
Life insurance generally covers all types of death, whether it’s from illness, injury or old age. Even death by homicide and drug overdoses is covered. Suicide is usually not covered within the first two years after the policy is purchased, but is covered after that time.
Accidental death and dismemberment insurance has a life insurance payout only for accidental deaths, such as a car crash or accidental fall.
Can I buy life insurance on someone else?
You can purchase life insurance on someone else, such as a spouse or a parent, as long as you have an “insurable interest” in that person. That means you would suffer financially if they pass away.
If you’re the policyowner for life insurance on someone else, you can make yourself the life insurance beneficiary and receive the payout.
But you can’t buy life insurance on someone else secretly—they’ll need to sign the application.
What is underwriting?
Life insurance underwriting is the process insurers use to decide whether to offer someone a policy and how much to charge. A full underwriting process includes a life insurance medical exam, a lengthy application and a review of your medical records.
Other types of underwriting processes aren’t as comprehensive and may not require a medical exam or health questions. These include guaranteed issue life insurance and simplified issue life insurance.
Policies that don’t require a full underwriting process usually cost more but may be the only option for people with health issues.