If you’ve heard of life insurance before, you’ve probably wondered… Who buys life insurance anyway? Do I need it? If you’re a parent, you might want to consider life insurance and how it can benefit your family. This guide to life insurance for parents will help you pick out the right option for you.
Quick Look: The Best Life Insurance for Parents
Best for Those Under 50 Years Old: Wysh
If you’re buying life insurance, you want to make sure you buy the best life insurance, right? Best is subjective, so that’s why we’ve put together some of the best companies you can choose from depending on your needs.
Wysh offers online term life insurance that gives you the options you need when you don’t have much time to spend searching for coverage. When you get started on the Wysh site, you can:
- Answer a few health questions
- Avoid a medical exam
- Customize your policy
- Purchase coverage up to $2.5 million
- Reach the customer service team with ease
You can stick to your budget with ease, get the coverage you need and even learn about the types of death benefits you should choose. While policies are not available for those over 50, Wysh works very well for young buyers, parents who need quick coverage and those who are required to purchase coverage in a hurry.
- No medical exams
- Customized policies
- Quality customer service
- Coverage not available for those over 50
Best for Term Life Insurance: Fabric
If you’re looking for a company that specializes in term life insurance, Fabric can give you what you’re looking for. It offers 10, 15 and 20-year term policies with coverage that ranges from $100,000 to $5 million. You can also purchase an accidental death insurance policy from this provider.
Fabric is a top choice for parents because it’s a company that’s designed to make getting life insurance for your family an easy process. It even offers a free service that allows you to put together a will and name a guardian for your children.
You’ll also benefit from the Fabric Vault, which allows you to store and organize all of your important financial information together in a secure digital environment.
- High value coverage is available
- Free will creation service
- Accidental death policy available
- Only term life is available
Best for Personalized Options: Sproutt
Sproutt is an independent broker who works with you to find the best life insurance for your family. When you visit the Sproutt website, you can enter a quick 8-step questionnaire to match you with the right coverage based on your lifestyle and needs. If you choose, you can fill out your application online without speaking with an advisor.
Or if you’d like some assistance, you can speak with an advisor about your options before you complete your application. The customer service team at Sproutt can help walk you through life insurance FAQs and answer any other questions you might have.
- Easy questionnaire
- Online application
- Can speak with customer service to get help with the application
- Policies are not guaranteed to save money
Best for No Medical Exam: Bestow
One of the things you should understand about life insurance policies is that you may need to undergo a medical exam before you can receive coverage. If you’re looking for quick coverage with no medical exam, Bestow can probably give you what you need.
Bestow offers a quick online application process and immediate coverage if you’re approved. You can choose from a 10- or 20-year term policy with coverage between $50,000 and $1.5 million. Bestow’s low rates and 100% online process make it a convenient option for many families.
- Purchase coverage up to $1.5 million
- Process is all online
- No medical exam
- Limited number of policies available
Best for Flexible Coverage: Ladder
- securely through Ladder Life Insurance's websiteBest For:Adjustable coverage
Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers – for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products. Coverage amounts vary by state.
Ladder understands that throughout your lifetime, your financial situation is bound to change at least once or twice. That’s why it offers the ability to decrease your coverage if you no longer need the amount of coverage you originally applied for.
If you expand your family and want to add more coverage to your policy, Ladder makes it easy to apply for that change as well.
Ladder offers term life insurance products issued by multiple highly rated insurers. You can apply for life insurance from Ladder in 5 minutes online and receive an instant decision. You could be eligible to accept and begin your coverage immediately.
- Same-day coverage available
- Adjustable coverage available
- Competitive rates for growing families
- Limited policies are available
How Much Does Life Insurance Cost?
It depends on the provider and your unique situation. Get an estimate below.
Life Insurance Premiums for Parents
Your life insurance comes with a premium. The premium is the amount of money you need to pay the insurance company for your policy. Basically, your premium cost is based on the amount of risk you pose. Every policy comes at a risk for the insurance company, whether it’s life insurance for a young parent or life insurance for seniors. When a company insures you, they are assuming a financial risk by giving you your policy.
A few factors your insurance company will consider when determining your risk are:
- Your age
- The type of coverage
- The amount of coverage
- The term length
Here are some examples of how these factors can affect your premium. (prices listed as of 12/10/21).
|28||$1 million||15-year||Haven Life||$54.32/month|
|44||$1 million||15-year||US Life||$58.27/month|
Whole Life vs. Term Life
One of the major questions to consider when it comes to life insurance is whether you should get whole or term life insurance. Be sure to compare your options before you decide which life insurance is best for you.
Whole life insurance is a form of permanent life insurance — it stays in effect for the rest of your life, as long as you pay your premiums. This type of life insurance also has a cash value component.
A portion of your premium payments will go towards the tax-deferred cash value. Over time, your cash value will grow and you will be able to access and use this money. You can use your cash value to pay for your policy, finance a loan for yourself or help you cover your expenses in retirement.
It’s important to note that the cash value of your policy will not be given to your beneficiary after you pass away. For example, if you have a $500,000 whole life insurance policy, your beneficiary will only receive that amount when you pass away. The amount that is paid out to your beneficiary is known as your death benefit.
Term life insurance is a policy that only lasts for the number of years you select when you purchase the policy. Terms are usually offered from 10–30 years. When your term ends, your life insurance policy expires. Your insurance company may allow you to convert your term life policy into a whole life policy at that point. However, in most cases, you’ll potentially need to purchase a new life insurance policy after your term life policy expires.
Term life insurance is a popular option because it tends to be less expensive than permanent life insurance products like cash value life insurance. Your term life insurance policy works just like a whole life policy, except it does not have a cash value.
If you pass away while your term life insurance policy is active, your beneficiary will receive your death benefit. The death benefit will be the coverage amount you selected when you purchased the policy. For example, if you purchased a term life policy with a coverage amount of $750,000, your beneficiary will receive this amount when you pass away. If your policy expires before you pass away and you do not purchase a new one, your beneficiary will not receive a death benefit.
3 Reasons to Buy Life Insurance as a Parent
Sure, carrying a life insurance policy adds another monthly bill to your budget. It can also be hugely beneficial to your family. Here are a few reasons parents should consider purchasing life insurance:
- To cover funeral costs: If you pass away, the last thing you want your loved ones to deal with is shelling out the money to cover your burial costs. Having a life insurance policy can ease this burden on your children.
- Not to leave your children responsible for paying your debts: Costs add up. And when you’re a parent, there are more costs than you could anticipate. Take a minute to think about all of your living expenses. Major things might include mortgage or rent payments, car payments and monthly utilities. That doesn’t even factor in other common debts such as student debt and credit card debt. If you pass away, you don’t want your children to be responsible for any of your leftover debts. Paying a relatively small amount each month for your life insurance can ease this burden for your children.
- If you share expenses with your spouse: If you and your spouse work, you can imagine the financial strain your family might have if one of you were to lose your job. If your spouse is a stay-at-home parent, what would happen if your income was no longer there? Purchasing a life insurance policy will help ensure that your family can survive financially without you.
When you purchase a life insurance policy, you’ll want to consider a few things beyond the life insurance company you choose. You’ll want to think about how much coverage you need to financially support your spouse and children when you’re gone. It’s also important to balance the amount and type of coverages with what premium cost fits in your budget. Once you know what you need, get quotes from insurance companies to see what each can offer you.
Frequently Asked Questions
Can a parent purchase life insurance for their child?
Yes, depending on the provider. Some do have age minimums. But either way, you can make your child a beneficiary of your life insurance policy.
Can you purchase life insurance for your parents?
Yes, you can purchase life insurance, burial insurance and end of life expenses coverage for your parents. Some providers do have age limits and finding cheap policies gets harder as you age. It’s best to have a comprehensive life insurance strategy for the whole family as early on as possible.
Benzinga crafted a specific methodology to rank life insurance. To see a comprehensive breakdown of our methodology, please visit our Life Insurance Methodology page.