How Much Life Insurance Do I Need?

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Contributor, Benzinga
June 13, 2023

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While most people can understand the value and necessity of life insurance, not many people know how much life insurance they need. The process of researching and analyzing providers can be overwhelming.

Benzinga is here to help, providing details on six insurance providers that have been thoroughly vetted by its team of experts. Benzinga also provides key takeaways to help you figure out how much life insurance you need.

How Much Life Insurance Do I Need?

It’s recommended to get life insurance that covers at least 10 times your annual salary. With this simple rule, someone earning $100,000 a year would look for $1 million in coverage. Take into consideration the years you have left until retirement.

If you are a 50-year-old who makes $50,000 a year, you would need $750,000 in life insurance coverage using this formula. The calculation takes into account that you have 15 more years until you retire at 65, and during these years you would earn $750,000 in total. Other methods exist, and you can contact customer support of the life insurance company of your choice.

What Life Insurance Should I Get?

If the process of choosing life insurance seems difficult, let Benzinga help you. Benzinga selected the 6 best providers and reviewed them based on several factors. Take a look at them and pick the one that is the most suitable for your needs.

Policygenius

Policygenius was founded in 2014, partnering with insurance providers to make insurance more accessible to the public. If you take a look at the website, you’ll appreciate the easy and simple interface.

While the website has all the necessary details, you can contact the company through a live chat feature. Not many companies have a better customer support system than Policygenius, and its team is always ready to help you.

Because its agents are paid a salary and don’t earn commissions, these experts focus on getting you the best life insurance you can find for your needs.

You’ll probably be able to find an insurance provider that doesn’t require a medical exam because of the many options in Policygenius' network of providers. In some cases, you get approved within 24 hours.

Pros

  • Customized policies created just for you
  • Lots of useful tools to assist you
  • Salary-based agents who don’t work off commission
  • Easy-compare for multiple policies

Cons

  • Some good providers not included
  • Major companies only
  • Need to re-enter credentials after provider selection

Ladder

  • Ladder Life Insurance
    Best For:
    Adjustable coverage
    securely through Ladder Life Insurance's website

    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.

Because it covers individuals between 20 to 60 years old, Ladder can be a great choice for younger people. It only offers term life insurance, which tends to be most cost-effective for younger insureds. 

Monthly premiums vary and cannot be precisely determined without taking several factors into consideration. Many satisfied customers agree that this is one of the cheapest life insurance providers. Its customer service team is available 5 days a week from 8 a.m. to 5 p.m. PST, and its team of experts managed to answer every question that was asked. 

Adjustable coverage is a notable feature. You can change the coverage amount, and the company charges no hidden fees. If you want to apply for Ladder Life Insurance, you can do so online. 

You can get a policy within minutes, but if you want coverage higher than $3 million, a medical exam is required. As an example, a 25-year-old male pays about $21 per month for a 20-year term policy with $500,000 of coverage. 

Pros

  • Adjustable coverage
  • No fees for cancellation and processing
  • The maximum coverage limit of $8 million
  • Quick and easy online application

Cons

  • A medical exam required for coverage higher than $3 million
  • No whole life insurance 
  • Age limit 

Colonial Penn

Colonial Penn can be ideal for seniors. If you are 50 or older, you can qualify for a life insurance policy that functions as one of the best for retired people. While it has a guaranteed acceptance, keep in mind that the maximum coverage limit is just $50,000. 

Colonial Penn offers permanent life insurance that remains active for the rest of your life as long as you pay your premiums. Compared to other providers, the coverage limit is low, but it might be just enough for someone who knows what they need.

If you have health issues and worry about passing the medical exam required by some insurance providers, you won't have to worry anymore. Colonial Penn has a guaranteed acceptance, and it won't ask for medical tests during the application process.

On the website, you can find a live chat feature to connect you to a real agent. Benzinga’s test call found an agent who was professional and friendly. Excellent customer service means high satisfaction among those that have an insurance contract with Colonial Penn.

Pros

  • Live chat in English and Spanish
  • Guaranteed acceptance with no medical exam
  • Excellent rating for financial strength
  • Term and whole life insurance

Cons

  • No mobile app
  • Low coverage amount of just $50,000
  • Not many policies to choose from

Bestow

Another company that provides exclusively term life insurance, Bestow is rapidly growing in popularity. With a wide choice of policies available, you can choose the one that's best for you. Whether it is for 10, 20 or 30 years, you can get term life insurance for coverage ranging from $50,000 to $1.5 million.

Anyone between 18 and 60 years old can apply for term life insurance at Bestow. A 30-year-old female who applies for a 20-year term life insurance with $500,000 coverage pays about $202 every year.

Out of the all providers Benzinga tested, Bestow has the fastest and easiest application process. If you meet the requirements, you are get accepted instantly without taking a medical exam. All necessary information is available to everyone.

While it hasn't released a mobile app yet, you can use Bestow’s live chat feature to connect with one of its experts who can guide you through the application process and answer every question you have.

Pros

  • Lots of terms to choose from
  • No medical exam required
  • Instant approval if you qualify
  • Does not offer whole life insurance

Cons

  • Not available for New York residents
  • No riders
  • Limited to people under age 60 

State Farm

State Farm is best known for its U.S. auto insurance. While its main expertise is in home and auto insurance, it also sells life insurance to customers of various ages.

Like Ladder, this company offers inexpensive plans that are suitable for those with a reduced budget. Founded in 1922, State Farm is one of the oldest insurance providers and has more than 85 million customers. You can find term, universal and whole life insurance policies on the website.

People as young as 16 can apply for $50,000 of coverage. In the past years, State Farm registered few complaints, which is impressive for a company of this size. 

If you are satisfied with State Farm’s term lifeinsurance, you might also consider auto, homeowner, renters and small business insurance from them. When it comes to experience and high-quality services, State Farm never fails to impress. 

Pros

  • Few complaints registered in the recent past
  • High customer satisfaction
  • Over 100 years old 

Cons

  • Android phone issues
  • No flexibility in term lengths
  • Medical exam requirement

New York Life

Term and permanent insurance are available from this provider, which can also be customized to get a death benefit. Its services are available in all 50 states. Most customers opt for permanent life insurance from this company, which also has policies available for 90-year-old applicants.

New York Life has a custom plan for whole life insurance in which you pay a higher premium for a couple of years to gain lower premiums in retirement. If you start this plan early, you’ll earn interest on a larger amount as time passes.

A variety of riders are available, and while some are free, others increase your premium. If you choose this company, it can also help you with mutual funds and long-term care insurance.

Pros

  • Few complaints for a company of this size
  • Riders offered
  • Other financial services provided
  • Strong financial rating

Cons

  • Higher-than-average costs
  • No mobile app
  • No online quote

How to Choose Life Insurance

To figure out how much insurance you need, you’ll want to get an idea about your insurance goals and figure out how much you need in coverage. It’s also important to take a look at your finances and see if you have enough monthly income to pay for the premiums. Some companies have cheap policies with lots of affordable options.

If you are ready, it's time to choose a life insurance provider. We picked the best 6 companies and reviewed them in this article so you won't have to search yourself. Compare policies until you find the one that fits your needs. 

Who Really Needs Life Insurance?

People with children or other dependents are strongly recommended to get life insurance as well as business owners. If you have life insurance, you can better take care of your family and protect your business in case of death.

Comparison

If you want to compare the providers recommended in this article, Benzinga created a short informative table to showcase the differences between them. This way, you can have a look at them and get an idea about how they operate.

ProviderBest forCustomer supportMedical exam
PolicygeniusCustomized policiesLive chatNot necessary
LadderYoung peopleLimited availabilityRequired for coverage > $3 million
Colonial PennSeniorsLive chatNot necessary
BestowTerm life insuranceLive chatNot necessary
State FarmMultiple insurance typesLimited availabilityRequired for most policies
New York LifeAddition of ridersCall onlyRequired for some policies

Calculating Life Insurance

Many companies that sell life insurance feature a handy calculator on their websites. With this tool, you can calculate life insurance and compare the insurer’s policies. If you still want to calculate life insurance yourself, you can try several methods. One way is to multiply your annual income by 10. Or you can get specific and estimate the number of years left until you retire. 

Why You Should Trust Benzinga

Benzinga wants to make sure you get accurate financial advice, including the best life insurance. Benzinga’s team of experts analyzed numerous life insurance providers to provide you with the best six companies. 

Features like customer satisfaction, company history, financial ratings and the experience the Benzinga team had with the company’s customer support service made up the standards that these insurers were held to. 

Frequently Asked Questions

Q

If you are 18 years old with no debt or dependents, do you need life insurance? Why?

A

While life insurance is recommended for many, certain groups may not benefit much from this service. People with no dependents probably don’t need life insurance.

Methodology

Benzinga crafted a specific methodology to rank life insurance. To see a comprehensive breakdown of our methodology, please visit our Life Insurance Methodology page.

About Thomas Jepsen

Thomas Jepsen has an MSc in Accounting, Strategy, & Control. He also has been heavily involved in finance for many years.