Best Term Life Insurance of October 2021

Amanda Hester

Protect your family with a term life insurance policy from unexpected financial burdens. We reviewed and compared the top term life insurance companies based on policy pricing, available options, customer support, financial strength, and overall quality.

Flexibility to adjust coverage throughout your term

$4.95/month

Rates From

$8,000,000

Coverage Up To

No (up to $3M)

Medical Exam

Overview

With Ladder, you can customize your insurance coverage depending on your unique needs throughout your term. You can remove coverage when necessary and apply to add more. Rates start from $4.95/month based on a 20-year-old female for a 10-year term, preferred plus health class.

What we like

  • Flexibility to adjust coverage throughout the term
  • Quick and simple coverage you can manage online
  • No medical exam required for coverage up to $3M

What we don't

  • No riders are availabe
  • Coverage ends at 70 years of age

Affordable online life insurance with great coverage

$9/month

Rates From

$1,500,000

Coverage Up To

Not Required

Medical Exam

Overview

Lemonade offers competitive insurance premiums for individuals between the ages of 18 to 60 years old. They base your monthly premium on health and medical data, determining which coverage options make the most sense for your individualistic needs.

What we like

  • Affordable premiums starting at $9/month
  • Super easy to sign up and make claims
  • Healthier individuals receive lower premiums
  • Low-risk lifestyle individuals get competitive pricing

What we don't

  • Risky lifestyles not covered, such as skydiving
  • No coverage for people over the age of 60

Easy going application with no medical exam

$10/month

Rates From

$1,500,000

Coverage Up To

Not Required

Medical Exam

Overview

Bestow determines the monthly premium for individuals based on how long a term they are looking for, their current health, and various other factors. You can receive a quote and determine the amount of coverage you are eligible for in minutes with no medical exam - you'll save yourself the hassle of going to appointments.

What we like

  • No medical exam
  • Individuals who do not smoke get better premiums
  • Flexible policy terms with coverage
  • Simple and straightforward application process

What we don't

  • No coverage for people over the age of 60
  • Only term life insurance is offered

Rewarding healthy lifestyle choices with better premiums

$9/month

Rates From

$3,000,000

Coverage Up To

May Need

Medical Exam

Overview

Sproutt uses their Guided Artificial Intelligence Assessment (GAIA) platform to evaluate individuals based on their movement, sleep, balance, nutrition, and emotional health to make an informed decision on life insurance coverage. The agency will reward you with lower premiums as you improve your lifestyle choices towards a healthy one.

What we like

  • Improving lifestyle choices will get lower premiums
  • The healthier you are, the more competitive your rate will be
  • Personzlied suggestions on lifestyle improvements

What we don't

  • If you are a smoker, you will end up paying more
  • May have to contact an agent for whole life insurance

Life insurance designed around for young families

$9/month

Rates From

$5,000,000

Coverage Up To

May Need

Medical Exam

Overview

Fabric understands that your family is extremely important, so it provides life insurance that will give the necessary financial security to your loved ones if you happen to pass on. In addition, Fabric offers its services online, and It is accredited by the Better Business Bureau with a grade of A+. The company offers accelerated underwriting for applicants who qualify, so you can be approved in minutes without a medical exam.

What we like

  • Healthy individuals with young families get better premiums
  • Convenience of applying and purchasing online
  • Creating free wills
  • 1% death benefit donated to charity (no extra cost)
  • 30-day grace period if payment fails

What we don't

  • Limited term length of 30 years
  • Not available in every state

Why you may need term life insurance? 

Term life insurance plays a fundamental role in financial planning. The main reasons you may need life insurance include: 

  • Protect your loved ones: Term life insurance is a safety net that replaces your income when you pass on. If your family relies on your income, the death benefit will help them sustain their living standards. 
  • To pay off outstanding debts: If you have recurring financial obligations when raising a family or taking care of your loved ones, the life insurance death benefit can help pay off these debts. 

The world is unpredictable and there are numerous uncertainties. That’s why term life insurance exists to minimize risks. There are various policyholders with different situations. The following are common policyholders: 

  • Students: Parents co-sign most student loans. In case the student passes on, the parents could have a rough time repaying the loan. A life insurance will settle the student loan.
  • Spouses: There are common shared daily or monthly recurring expenses among spouses. In case you die, your spouse may be unable to manage these expenses alone. 
  • Business owners: You want your business to remain operational even after you die. Your family or business partners can use the death benefit to expand the business and pay off your creditors. 
  • Parents: Every parent’s dream is to provide a solid financial future for their kids. A life insurance with a sufficient death benefit secures your kids’ futures and helps them pay tuition fees & house bills when you pass on.  
  • Homeowners: You have worked hard to achieve your homeownership dreams through a mortgage, and you do not want your loved ones to lose it when you die. A term life insurance would pay off the mortgage when you die. 

How does term life insurance work?

Term life insurance policy provides coverage for a certain period. The coverage remains effective during this period, provided you make your premium payments. The premiums can be paid annually, quarterly or monthly, depending on your provider. If you pass away when the coverage is still active, the insurance agency pays out a death benefit to your beneficiaries. 

It is recommended you inform your beneficiaries about the term life coverage, as they will be required to file a claim and attach a copy of your death certificate to receive the payout. 

The death benefit varies depending on your financial situation and the provider. Take into account your outstanding debts and house bills when choosing the death benefit limit. It provides a safety net for your loved ones, so they can use the death benefit to cover these financial obligations if you happen to pass away. 

Below are few steps to follow when purchasing term life insurance:

  • Get a quote: You can get a term life insurance quote from an online provider, speaking to a life insurance expert, or visiting a branch in person.
  • Choose a policy: There are various types of term life insurance (more about this later).
  • Fill out application forms: You can fill the forms online or in person at the provider’s offices. 
  • Take a medical exam: Unless you are purchasing a no medical exam term life, your provider may require medical examination. The examination may be free or at a fee. 

The underwriter reviews your application information to determine the premium rate and death benefit. The coverage begins after signing the policy and making the first premium payment. 

Types of life insurance 

There is a range of term life insurance plans to choose from. They include:

  • Level term insurance: This is also referred to as a level premium insurance. This policy offers coverage for a certain period ranging between 10 and 30 years. Premium payments and the death benefit are fixed. 
  • Decreasing term life insurance: Under this policy plan, the death benefit decreases annually depending on a predetermined agreement. Premiums remain fixed during the policy period. A perfect example of this policy type is mortgage life insurance, where payouts are tied to the outstanding mortgage balance. 
  • Annual renewable term life insurance: You are required to select a period of insurability during which you won’t need to reapply. For instance, you can choose to renew the policy annually, every two or even five years, depending on your term. However, your premium rates increase annually. 
  • No medical exam term life insurance: Individuals unwilling to undergo a medical examination can choose this policy plan. However, they need to share their medical history with the insurance provider. 
  • Convertible term life insurance: An insurance agency can allow you to convert your term life policy into a permanent policy. If you predict that your income may increase in the future and wish to enjoy permanent coverage, this policy plan can potentially be beneficial. 

What does term life insurance cover and not cover?

Each policy coverage is different and it varies depending on the provider. Common coverages include death resulting from:

  • Natural causes, such as illnesses
  • Accidents, e.g., car accidents, fire
  • Suicide (only paid if the suicide clause period expires)
  • Homicide(cannot be paid if the beneficiary took part in the murder) 

Exclusions: 

  • Crime
  • Fraud
  • Hazardous hobbies, such as skydiving, unless covered in the policy. 

How much term life insurnace coverage do you need?

The amount of coverage required depends on your insurance needs and financial situation. If you have financial obligations such as debts, a mortgage, or a car loan, then you may need a policy that provides a sufficient death benefit to pay off the debt and sustain your family. It helps to purchase a policy you can pay comfortably to avoid cancellation. 

Financial experts recommend that a life policy plan should equate to 10-15 times your income.

How are term life Insurance rates determined?

The rates vary based on the insurance agency and buyer. They include: 

  • Policy details: This includes the coverage amount and term length. A policy with a high death benefit costs higher. Similarly, you may incur high rates for a longer-term policy. 
  • Risky hobbies: People with risky habits, such as sky diving, and dangerous driving may incur higher premiums.  
  • Gender: Statistics reveal that women live longer than men. Sometimes, men are involved in riskier jobs that leave them more exposed to fatal accidents. Insurance providers offer lower rates to women than men. 
  • Health: This includes blood pressure, cholesterol, and weight against height, etc. Individuals with life-threatening or underlying conditions, such as diabetes may be charged more. 
  • Age: If you are young, the insurer is less worried about issuing a death benefit to your family. Younger individuals incur lower rates than older ones. 
  • Family health history: Some insurance providers may charge higher premiums if your family has a history of certain conditions. 
  • History of substance abuse: People with a history of substance abuse may pay higher rates. Habits such as smoking put individuals at higher risks of suffering health ailments. 
  • Criminal history: Individuals with a past criminal history may incur higher costs compared to those without a criminal record. 
  • Riders: Some insurance companies allow you to customize your policy and include riders at an extra cost. 

How to choose the best term life Insurance?

It helps to compare term life insurance costs as it can save you several thousands of dollars. A good insurance plan offers not only competitive costs but also flexibility, among other benefits. Consider the following guidelines when purchasing the best plan:

  • Company strength: Experts recommend insuring your life with a reliable insurer that has built a solid reputation over the years. You want to be sure that your provider will be around for the next 30 years before you purchase the policy.
  • Policy conversion: You may need to upgrade your policy to a permanent one in the future should your financial situation change. Inquire from the provider if your current plan allows you to convert. 
  • Costs: Compare costs for various plans from different providers. You do not want to purchase a plan that is too expensive to afford. 
  • Medical examination: Some policy plans require a medical examination while others do not. The costs for no medical examination plans are relatively higher. 
  • Customer Reviews: Reading through customer reviews from the insurer’s official website helps you understand which plan works best for a particular group. You will also identify an insurance plan that offers value for your money.