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Life insurance is confusing. NerdWallet and Quotacy have partnered to help you figure out how much life insurance you need and how to choose the right policy.

Determine life insurance needs

Find out if life insurance is right for you. Your life insurance needs will differ depending on your situation.

Compare companies

Life insurance can be complicated. This guide helps you compare life insurance companies.

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Types of life insurance

Life insurance comes in many different flavors. This guide helps you determine the best type.

What is life insurance?


Life insurance protects anyone who depends on you financially. If you die unexpectedly, life insurance provides money that can offset the sudden loss of income.

There are a few reasons to buy life insurance:

Protecting your family. Your family depends on you. In the event of your death, your family and dependents will need a financial cushion to get back on their feet. If you have children, you might want to cover their child care and education costs until they are adults. If you have a mortgage or other debt, you want to make sure your family is not burdened by it after you are gone.

Protecting your business. Business owners who want to ensure that their business keeps running are prime candidates for life insurance. Life insurance can help your partners, employees and heirs. Business owners also might want to consider life insurance policies for key employees.

Protecting your heirs. For high net-worth individuals with large estates that will be subject to estate tax, life insurance can help heirs pay their taxes rather than selling off assets.

How do I choose a policy?


First, you need to choose a policy type. The two major types of life insurance are permanent and term. For the majority of consumers, term life insurance is the right choice. Term insurance covers you for a set amount of time, and the benefit can be used to cover any expenses in case you die. When choosing a policy, you should keep your goals in mind. If you are a new parent, you want to make sure your policy will cover any child care, education and other costs for your children. If you own a home, you want to make sure your spouse will be able to afford the mortgage payments without your income.

Once you choose a policy type, you need to determine a policy amount. When choosing a policy amount, you need to keep your financial obligations in mind. If you are a parent, you will most likely want to cover child care and education costs. If you’re a homeowner, you will probably want to cover your mortgage.

With term life insurance, in addition to choosing a policy amount, you will have to decide a policy duration. Policies can last for up to 30 years. To choose a term life insurance policy duration, you should take your longest lasting financial obligation into account. For example, if you have 30 years left in your 30-year mortgage, you will most likely want to get a 30-year life insurance policy as well.

What do I need to apply?


Basic information: Companies will need your date of birth, ZIP code and gender to give you a quote. The older you are, the more you will have to pay for life insurance. Men and woman also pay different rates. Policies will vary slightly from state to state.

Health information: Health information is very important when calculating life insurance rates. To provide a quote, companies typically will ask for basic health information such as height and weight. Eventually, the company to which you apply will ask you to sign a release for your medical records. Most policies also require a medical exam before setting the final premium.

Lifestyle information: When calculating life insurance rates, companies will take your lifestyle into account. Smokers pay much more for life insurance than nonsmokers. Similarly, people who engage in extreme sports and people with bad driving records will probably pay more.