The Best Life Insurance Plans of 2022

Protect your loved ones’ financial security with the best life insurance plans of the year. Compare plans, get a free quote, and apply online in minutes.

Last Updated: September 2022

An Introduction to Life Insurance

Life insurance is an affordable way to financially support your loved ones in the event of your untimely death.

In a traditional life insurance contract, a life insurance company agrees to provide a lump sum payout to a customer’s loved ones in the event of the customer’s death during a set period of time. In exchange for this payout, the customer agrees to pay monthly installments to the insurance company for the life of the coverage contract.

Life insurance coverage is usually restricted to specific lengths of time, known as terms. For example, a customer may agree to sign a life insurance policy for a term of 10 years. A customer’s coverage and premium payments would only last for these 10 years.

In order to be considered for life insurance coverage, customers must apply. During the application process, a life insurance company may ask a potential customer for personal information, medical records, and other identifying information. Traditionally, life insurance companies would require applicants to receive a health exam before offering coverage. Nowadays, life insurance providers have mostly done away with the medical exam requirement—just like the companies listed in our chart above.

Buzz Words

Here are some common definitions you’ll need to understand while browsing life insurance providers:

  • Premium - The amount the customer pays to the life insurance provider for coverage, typically on a per-month basis.
  • Benefit/Death Benefit/Payout - The coverage amount paid out to an insured person’s loved ones in the event of his/her death. Payouts are typically paid out tax-free.
  • Beneficiary - The individuals named to receive a portion of the insurance customer’s benefit amount. Life insurance customers can pick multiple beneficiaries or stick with just one.
  • Term - The length of coverage agreed upon by the life insurance company and a customer. Term lengths average anywhere from 10–30 years.

Types of Life Insurance

Life insurance providers mainly offer two types of life insurance products.

Term

The more common of the two life insurance products, a term plan is one that only exists for a set amount of time. While a term is active, a customer pays monthly premiums and receives financial coverage in the event of their death. Once the set term has ended, both coverage and premium charges also end.

As they incur less risk on the end of the life insurance provider, term life insurance is much cheaper than whole life insurance. For every $7 a customer pays toward a term life premium, the same coverage would cost $100 for a whole life plan.

It’s important to understand that term plans have no cash value. The premiums paid into a term plan do not accrue in the market, they go straight to the insurance provider. A term plan can usually be canceled, but the premium charges can not be recollected by a customer.

Whole Life

Whole life insurance does not carry a term limit, meaning coverage extends until the death of the customer (as long as the customer continues to pay their premiums until their death.)

In addition to the death benefit payout, whole life insurance products carry a cash value accumulation. As customers pay monthly premiums, some of this money is invested into the market, gaining value over time.

It’s important to understand that, under most whole life insurance contracts, the customer’s beneficiaries cannot receive both the death benefit and the cash value accumulation.

Why Life Insurance Matters

The primary goal of life insurance is to provide a financial safety net to the people in your life who depend on your current income. Beneficiaries often include spouses, children, and parents or grandparents, but just about anyone can receive a slice of your payout as you see fit.

When deciding on whether or not to purchase life insurance, ask yourself two primary questions:

  • 1) Will my untimely death push any unpaid debts onto someone I care about? Debts that others may accrue could include co-signed student loans, mortgages, or business loans.
  • 2) Do any of my loved ones currently depend on my annual income in order to achieve their goals? These goals might be for: spouses to live comfortably, children to go to college, a mortgage to continue to be paid off.

If the answer is “yes” to either question above, a life insurance policy may be right for you.

Frequently Asked Questions (FAQ)

To find a life insurance provider that works well with your needs, try to focus predominantly on your budget. How much coverage are you looking for? What is your monthly budget for premium payments? After asking yourself questions like these, request quotes from the providers in our list. Quotes are typically free, so you can directly compare one provider’s pricing and coverage with another’s.
Life insurance can matter in your 20s or 30s depending on two variables: the debts you owe and the people who depend on your income. Let’s provide two examples. Debt can fall onto loved ones from even an early age, as with students who have a parent co-sign on a student loan. In the event of the student’s death, the student loan debt would pass onto their parent. If a couple purchases a property, both partners may depend on each other’s combined income to pay off the mortgage.
Most employer-funded life insurance policies only cover 1x–2x an employee’s annual salary. For individuals who help fund others’ standard of living, this benefit amount is simply not enough to protect loved ones. Additionally, a life insurance policy is typically voided if the employee is fired or quits, making this life insurance policy much more fragile than a third-party life insurance policy.
Whatever your beneficiaries want. Beneficiaries will commonly use life insurance payouts to continue to pay off a mortgage, pay for education, or pay everyday living expenses.