{"id":323825,"date":"2025-11-07T20:52:10","date_gmt":"2025-11-08T01:52:10","guid":{"rendered":"https:\/\/www.reviews.com\/?page_id=132805"},"modified":"2025-11-07T20:52:11","modified_gmt":"2025-11-08T01:52:11","slug":"guide","status":"publish","type":"page","link":"https:\/\/www.reviews.com\/insurance\/life\/guide\/","title":{"rendered":"How to Buy Life Insurance"},"content":{"rendered":"\n\n\n

Life insurance can be a difficult item on the financial to-do list. \u201cBuying something for when you die is not appealing, but you still need to take the time to research it,\u201d says Zhaneta Gechev, a 15-year life insurance agent and owner of OneStopLifeInsurance.com<\/a>. \u201cThe biggest mistake I see when people shop for life insurance is to rush through it.\u201d In 2025, shopping smart also means understanding digital advances like e\u2011applications, e\u2011sign\/e\u2011delivery and accelerated underwriting, which can shorten time\u2011to\u2011issue for eligible applicants (LIMRA\/Life Happens Barometer<\/a>; Gen Re AU survey<\/a>).<\/p>\n\n\n\n

Take time to match coverage to your needs and choose a financially strong insurer. Consumer guides from the NAIC<\/a> and the Insurance Information Institute<\/a> explain key policy types, riders, illustrations and how to compare insurers. We\u2019ll walk through a 6\u2011step process\u2014using current market practices and data\u2014so you can select coverage that fits your budget and provides the right guarantees for your family.<\/p>\n\n\n\n

How to Buy Life Insurance in 6 Steps<\/h2>\n\n\n
    \n
  1. Decide whether you need life insurance<\/a><\/li>\n
  2. Choose the right type of life insurance<\/a><\/li>\n
  3. Determine your death benefit<\/a><\/li>\n
  4. Consider adding riders to your policy<\/a><\/li>\n
  5. Compare life insurance companies<\/a><\/li>\n
  6. Compare quotes and buy your life insurance<\/a><\/li>\n<\/ol>\n\n\n <\/span>\n \n\n\n

    1. Decide whether you need life insurance<\/h3>\n\n\n\n

    Buy life insurance if someone relies on your income or you have debts or obligations that would continue if you died. Group life through work is typically term coverage and often limited to about one times salary; it may not be portable if you change jobs\u2014so it rarely replaces an individual policy for long\u2011term needs (Insurance Information Institute<\/a>). Also note that government support is limited: Social Security\u2019s lump\u2011sum death payment is only $255, and survivor benefits depend on age, earnings history and dependent status (Social Security Administration<\/a>). You can learn more in our article \u201cDo I Need Life Insurance?<\/a>\u201d <\/p>\n\n\n\n <\/span>\n \n\n\n

    2. Choose the right type of life insurance<\/h3>\n\n\n\n

    Life insurance falls into two broad categories: term (temporary protection) and permanent (lifetime protection with cash value). Permanent options include whole life, universal life (current\u2011assumption UL and guaranteed UL), indexed UL (IUL), and variable UL (VUL). Rising interest rates in recent years have generally improved credited rates on fixed products and dividend scales for participating whole life, but illustrated values are never guarantees and fees\/charges still apply (III<\/a>; NAIC<\/a>; AM Best market commentary<\/a>). For UL\/IUL\/VUL, understand policy charges\u2014cost of insurance (COI), expense loads and possible surrender charges\u2014as these directly affect cash value performance over time (NAIC<\/a>).<\/p>\n\n\n

    \n \n
    \n
    \n \n
    \n \n \n \n \n \n \n \n \n \n \n
    \n \n <\/td>\n \n
    Term Life Insurance<\/center>\n <\/td>\n
    		\n
    Permanent Life Insurance (Whole Life or Universal Life)<\/center>\n <\/td>\n <\/tr>\n
    \n
    Coverage length<\/center>\n <\/td>\n
    		\n
    Temporary
    \nUsually 10-30 years<\/font><\/center>\n <\/td>\n
    		\n
    Permanent
    \nUntil the insured passes away<\/font><\/center>\n <\/td>\n <\/tr>\n
    \n
    Cost<\/center>\n <\/td>\n
    		\n
    $<\/font><\/center>\n <\/td>\n
    		\n
    $-$$<\/font><\/center>\n <\/td>\n <\/tr>\n
    \n
    Cash value account\u00b9 <\/center>\n <\/td>\n
    		\n
    No<\/font><\/center>\n <\/td>\n
    		\n
    Yes<\/font><\/center>\n <\/td>\n <\/tr>\n
    \n
    Best for<\/center>\n <\/td>\n
    		\n
    Affordable coverage
    \nYoung parents and families
    \nStandard life insurance needs<\/font><\/center>\n <\/td>\n
    		\n
    Seniors\u00b2
    \nEstate planning
    \nSecondary retirement savings<\/font><\/center>\n <\/td>\n <\/tr>\n
    \n \n <\/td>\n \n
    Learn more<\/a><\/font><\/center><\/u>\n <\/td>\n
    		\n
    Learn more<\/a><\/font><\/center><\/u>\n <\/td>\n <\/tr>\n <\/tbody>\n <\/table>\n <\/div>\n \n <\/div>\n \n <\/div>\n<\/section>\n\n\n\n\n\n

    \u00b9Learn more about cash value life insurance<\/a>
    \\n\u00b2Learn more about     guaranteed universal life insurance, our recommendation for senior life insurance<\/a><\/font><\/font><\/p>\n

    \u201cFor most people looking for a simple financial protection product, term life insurance<\/a> makes the most sense,\u201d says Mitch McLean, Director of Brokerage at PolicyAdvisor.com<\/a>. \u201cYou can almost think of it like leasing a car: You have the coverage while you are paying, but when the contract ends, the coverage is over.\u201d Modern term policies often include convertibility (switch to permanent coverage without new medical evidence within a set window) and renewability at age\u2011based rates\u2014key features to verify when you compare policies (NAIC<\/a>; III<\/a>).<\/p>\n

    Whole life insurance<\/a> provides lifetime coverage with guaranteed premiums, death benefit and minimum cash values; many policies are \u201cparticipating\u201d and may pay non\u2011guaranteed dividends that can be taken in cash, used to reduce premiums or buy paid\u2011up additions. Loans\/withdrawals reduce cash value and death benefit and can cause lapse or taxes if unmanaged (III<\/a>).<\/p>\n\n\n

    Universal life insurance offers permanent coverage with flexible funding and several variants: current\u2011assumption UL (interest declared by the insurer, subject to minimums), guaranteed UL\/no\u2011lapse (focus on a guaranteed death benefit to a selected age with little cash value), indexed UL (interest credited by index formulas with caps\/participation rates and floors; policy does not directly invest in the index), and variable UL (market\u2011based subaccounts with values that can rise or fall). IUL parameters can change over time, and VUL involves market risk and requires a prospectus (III<\/a>; NAIC<\/a>; FINRA<\/a>).<\/p>\n\n\n\n

    If you\u2019re on the fence, ask an independent agent for side\u2011by\u2011side policy illustrations under conservative assumptions and stress tests. Illustrations are educational tools\u2014not guarantees\u2014and policy charges (COI, expenses, surrender charges) and crediting assumptions materially affect long\u2011run performance, especially for UL\/IUL\/VUL (NAIC<\/a>; FINRA<\/a>).<\/p>\n\n\n\n <\/span>\n \n\n\n

    3. Determine your death benefit<\/h3>\n\n\n\n

    The amount of coverage you purchase on your life insurance policy is known as a \u201cdeath benefit.\u201d This dictates the amount that would be paid to your beneficiaries if you were to pass away while covered by your life insurance. Death benefits are generally excluded from beneficiary income for federal tax purposes, but any interest paid (for example, under settlement options or delayed payments) is taxable; outstanding loans and prior accelerations reduce the final payout (IRS FAQs<\/a>).<\/p>\n\n\n\n

    The death benefit, typically paid out as a one-time lump sum, should be enough to cover any financial obligations you\u2019d leave behind if you passed away. Expenses covered by the death benefit could include:<\/p>\n\n\n