Deciding to buy life insurance is a major step toward financial security for your family. A life insurance policy can help you feel confident in your family’s future, even if you’re no longer there to take care of them. That’s why choosing the right one is key.

Life insurance comes in different types, amounts, and lengths to meet a variety of needs. Choosing which life insurance plans fits your goals and budget can help ensure your policy works well for you both now and later. Luckily, it’s easy these days to compare life insurance plans through a little online research. Here’s what to consider in your life insurance comparison.

What is life insurance?

Life insurance is a contract between you and your insurance company meant to safeguard others against financial hardship caused by your death. You commit to make regular payments, called premiums, to keep the policy active. In exchange, your life insurance company will make a payout to the beneficiaries you choose if you die while the policy is active. This money is typically tax-free and comes with no strings attached, providing a safety net for those who depend on you financially.

Why should I get life insurance?

If you’re not sure whether you need life insurance, ask yourself: “Would anyone be worse off financially if I died?” If the answer is yes, you (and them) would benefit from coverage.

A life insurance policy provides a way to cover immediate needs, like housing and groceries, along with long-term goals, like a child’s college tuition. While many people buy it to provide a cash cushion for their partner and kids, the payout from a policy can help support other relatives, business partners, or even charities. There’s a good chance you need life insurance if:

• You’re the primary provider for your family
• You’re caring for an aging parent or other relative
• You have a mortgage that your family would have challenges paying without you
• You want to cover end-of-life expenses, like a funeral or medical bills
• You own a business that would suffer financially if you died
• You have student loans or other co-signed debts
• You’re planning to start a family soon

How to compare life insurance policies

Once you’re ready to shop, you’ll quickly find an abundance of life insurance plans out there. So how do you choose? The amount you need to leave behind or your premium costs may seem like the biggest factors in your choice, but there are a few other key things to consider. Your current and future goals, how long you need coverage, and even your health and age will all factor into how you compare life insurance policies. Here are a few ways to compare your life insurance plans.

Compare by Type of Life Insurance

There are two main forms of life insurance policies: term and permanent life. Here’s how they stack up to help you compare life insurance types and find out which is best for you.

A term life insurance policy provides coverage for a certain amount of time, called a “term.” Term life insurance policies are designed to protect your family during critical years, like while you’re raising kids or paying off your home mortgage. You choose the term, which typically ranges from 10 to 30 years, and your policy will provide a cash payout if you die during that time. Term life is easy to understand and affordable, so it’s often the best choice for families with children.

A permanent life insurance policy, on the other hand, offers coverage for your entire lifetime as long as you keep up with your premiums. Permanent life insurance premiums are more expensive than term life policies per dollar of coverage, but they never expire. Many permanent life insurance plans also build cash value that you can access while owning the policy. Final expense insurance, also known as funeral insurance, is a permanent life insurance policy available to older adults specifically meant to cover funeral costs. If you want a policy guaranteed to pay out no matter when you die and can afford the higher premiums, permanent life insurance is likely the best fit for you.

Compare by Coverage Amount

Life insurance comes in a wide range of coverage amounts, from final expense plans starting around $5,000 to term life policies that offer $1 million or more in coverage. Your coverage amount dictates how much the policy will pay out in the event of your death. When you die, your beneficiaries receive that amount as a lump sum of cash, which they can spend on whatever they choose. When comparing life insurance policies, keep in mind that higher coverage amounts generally mean higher premiums.

So how much life insurance coverage do you need? The general rule of thumb is to buy seven to 10 times your annual income in life insurance, but the real answer is different for everyone. Get your personalized estimate using our term life insurance calculator.

By Term Length

If you buy term life insurance, you’ll need to choose a term length. Terms typically range from 10 to 30 years. While longer terms will cost more than shorter terms, they can end up saving you money in the long run. If you reach the end of your term and you still need coverage, you’ll end up paying much higher rates based on your current age. Learn more about choosing a term length here.

By Cost

It can be helpful to compare life insurance plans by getting quotes from several insurers to see which has the best rates for you. Different insurance carriers calculate rates differently, so one plan might be a better fit for you than another based on your profile. Your age and health are typically the biggest factors that affect price, but there are a few other key factors to keep in mind, too. To see how much you might pay for life insurance, just answer a few simple questions to get a Fidelity Life quote.

By Insurance Provider

When choosing a life insurance provider, find a company with a history of excellent customer service, a safe and convenient sign-up process, a wide selection of life insurance plans, and fast approvals. This is a company you’ll be working with for decades in most cases, so you want to select one you trust. Find out more about Fidelity Life’s 125-year commitment to making life insurance simple, fast, and affordable for everyday Americans.

Bottom line: life insurance comparison

It’s important to compare life insurance policies before you buy to make sure your coverage works as hard as you do to support your family. With Fidelity Life, you can easily explore different life insurance quotes and coverage options, with the ability to purchase a policy either online or by phone. Give our agents a call or start your quote today.

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.