Most people know the basics about life insurance (in fact, that’s probably why you’re here on this website). Simply put, life insurance helps protect your family financially by providing them with a cash payout in case the worst happens to you.

That said, there are some lesser-known facts about life insurance that might surprise you. And if you’re feeling extra curious about life insurance these days, you’re in good company. Life insurance applications rose 4.1% in 2020 compared with the previous year. Applications are up 7.4% among people under 45, as younger people looking to protect their families during the pandemic drive most of the increase.

While these policies are easy to understand and buy, knowing the details about life insurance can help you shop more confidently. Here are eight key life insurance facts to know.

8 facts about life insurance

Life Insurance Is Just As Important as Savings and Retirement in Your Financial Planning.

You know that creating a nest egg for emergencies and putting aside money for retirement are key for your family’s financial security. But what would your family do if they suddenly couldn’t rely on your income? As a general rule, if anyone depends on you financially, life insurance should be part of your financial plan. According to a 2020 industry study, nearly two in three people say they bought life insurance to replace their wages or income if they died. Your family can use the money from a policy to buy day-to-day essentials, pay the mortgage, cover debts and end-of-life expenses, or save for a child’s education.

Not All Life Insurance Plans Are the Same.

Wondering what kind of life insurance to buy? There are two main types to know about:

• Term life insurance is the most affordable and simple, which makes it a good fit for most families. It protects you for a set length of time, or “term,” that you can customize based on your financial needs.
• Permanent life insurance, which includes whole and universal life insurance, never expires and also builds cash value over time. It’s more expensive than term insurance, but can make sense for people with lifelong financial responsibilities.

You Probably Need More Coverage Than You Think.

Nearly half of people with life insurance say they either need more or aren’t sure if they have enough coverage. So how much is enough? Experts often recommend buying seven to 10 times your annual income in life insurance, but the right amount is different for everyone. Our term life calculator can help you estimate your needs.

Coverage Through Work Often Isn’t Enough.

Life insurance through your employer might be a nice job perk, but relying on group coverage alone can leave you unprotected. The payout is often smaller than most families need, and your group life insurance policy won’t follow you if you get another job or get laid off. Buying an individual life insurance plan can help make sure you have enough coverage, no matter what happens in your career. Get the facts about term life vs. employer-provided life insurance on our blog.

Life Insurance Costs Way Less Than Most People Think.

As interesting life insurance facts go, this one definitely ranks among the best pieces of news: Consumers overestimate the cost of life insurance by 300% on average. In reality, a healthy 30-year-old woman can buy a 30-year, $250,000 term life insurance policy from Fidelity Life starting at $27 per month.

It’s Important To Get Life Insurance Coverage While You’re Young and Healthy…

The cost of life insurance goes up each year as you age, which is why the best time to buy is almost always “right now.” Outstanding health issues, like chronic conditions, can also lead to higher costs or prevent you from qualifying for certain plans. If you’re a healthy young adult who needs coverage, consider looking into your life insurance options sooner rather than later.

…But There Are Options Available if You’re Older or Have Health Issues.

Term and permanent life insurance sometimes aren’t the best option, depending on your age or health status. But that doesn’t mean you have to go without coverage. If you’re worried that a life insurance company will turn you down because of your age or health, no medical exam life insurance products can still provide financial peace of mind. Fidelity Life offers a variety of no medical exam plans for people who have health issues or have been turned down for other types of life insurance.

It’s a Lot Quicker To Get Life Insurance Coverage Than It Used To Be.

Historically, it took weeks or even months to get approved for life insurance. Today, buying coverage is something you can check off your to-do list during your lunch break. At Fidelity Life, you can shop for life insurance safely and quickly online or over the phone, and coverage often starts the same day.

At Fidelity Life, our goal is to make life insurance simple, affordable, and understandable for everyday families. This content is intended for educational purposes only. Each post is carefully fact-checked, reviewed, and updated regularly to ensure the information is as relevant as possible.