Life insurance basics

Learning Center

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  Bestow Team | 5 min

  Author: Bestow Team, reading time: 5 minutes

  Top Questions About Bestow Answered

  Life insurance is confusing. We get it. With so many options out there, it’s hard to figure out where to even start. Chances are that if you’re reading this, you have questions, too. Fortunately, you don’t have to do this alone. Every day we answer phone calls, chat messages, and emails from customers who want to buy life insurance coverage but don’t know the best way to go about it. There’s no shame in that. There’s a reason why insurance agents and brokers need to have a license to sell policies to customers — it’s a complicated topic! Oftentimes, we hear this: “I don’t know what questions to ask.”

  If that’s you, then you’re in the right place! Here, you’ll find the top questions people just like you are asking.

  What Kind of Life Insurance Does Bestow Offer?

  Bestow offers term life insurance. A term life policy is as easy as 1-2-3.

  1. Choose a term (between 10 and 30 years, in 5-year increments),
  2. Select a coverage amount up to $1.5 Million, and
  3. If approved, pay a set monthly premium throughout the duration of that term.

  Policies offered by Bestow have level premiums, which means your monthly premium will never change, as long as your policy is in force — no matter your term length. Lock in your rate today!

  How Do I Know I’m a Good Fit for a Policy Offered by Bestow?

  If you’re in generally good health and between the ages of 18 and 60, a policy offered by Bestow might be a great fit for you. Most applicants get an instant underwriting decision, so you don’t have to wait weeks to find out whether you’re approved for coverage.

  What Is the Application Process Like with Bestow?

  Bestow’s 100% online application process has four simple parts:

  1. Your basic identifying information: email, address, and Social Security Number.
  2. Your life. This includes citizenship, medical history, lifestyle, and hobbies.
  3. Beneficiaries. This is whoever would receive the death benefit in the event of the insured’s death.
  4. Policy and payment details. If approved, choose the coverage amount and term length, then enter credit card info to purchase and bind the policy.

  It’s as easy as that! In as little as 5 minutes, you can apply for a term life insurance policy.

  

  Is a Medical Exam Required to Get a Policy Offered by Bestow?

  Not with Bestow. A medical exam helps an insurance company double check how healthy you are. Instead, Bestow’s underwriting engine checks your health with big data and technology, which saves you time and money. We’ve partnered with third-party agencies to gather information in order to assess your risk and eligibility for a life insurance policy — instead of paperwork, medical exams, and lab tests. Here’s a detailed explanation of how Bestow works.

  How Is Bestow Different Than Other Insurance Companies?

  Bestow’s application process is entirely online. Seriously, 100%. Many companies offer an indicative quote online, but then refer applicants to an agent in order to finish the application process. Other online life insurance options may still require a medical exam for certain coverage amounts or applicants. We’ve completely re-engineered the application experience for term life insurance to be super simple and more affordable. Apply in as little as five minutes, and most applicants get an instant decision. Unlike some other online life insurance providers, we underwrite the policies we offer in-house with our own technology — accelerated underwriting. Our data and technology allows us to help our customers with just about any request.

  What is Accelerated Underwriting?

  Think of this accelerated, algorithmic underwriting as our secret sauce. We use that big data and our proprietary technology mentioned above to quickly determine your risk and eligibility instantly.

  What Determines How Much I’ll Pay For Life Insurance?

  Your level of risk is what determines your premium and monthly rate. Risk is the likelihood that an insured event (in this case, death) should occur during the policy term. The higher your risk, the more you will likely pay. Life insurance risk factors include basic information about you (like your age, height, and weight) in addition to things like your medical history and lifestyle. But each insurance company has their own underwriting process — that’s the process by which an insurance company determines whether it can accept the risk of an applicant for life insurance, and if so, on what basis so that the proper premium is charged. Here’s more information on life insurance risk and underwriting.

  What Is the 30-Day Money-Back Guarantee?

  It’s a 30-day free look period to examine your life insurance policy to see if it meets your needs. If you cancel your policy within the first 30 days, you’ll receive a refund.

  How Can I Trust You? You’re a Startup.

  Our policies are issued and backed by A+ rated (superior) industry giant North American Company for Life and Health Insurance®. They’ve been around for over 100 years. If anything were to happen to Bestow, your policy is well taken care of. But don’t worry, we aren’t going anywhere.

  How Can I Trust My Beneficiary Will Get Paid?

  North American Company for Life and Health Insurance® is the insurance carrierand pays the claim for policies purchased through Bestow. We are here to walk whoever is making the claim through the process and answer any questions.

  What Happens If I Die During My Term?

  Should you pass away, your beneficiary will contact Bestow to get started on the claims process. A Customer Care Advisor will walk them through the process and answer any questions while North American Company for Life and Health Insurance®processes and reviews the claim. In most cases, life insurance policies will have a two-year contestable period where the insurance company may investigate the cause of death and review the information provided on the application (only if there’s a reason). If information is found to be false or inaccurate, the insurance company can deny the payment of the life insurance benefit. Additionally, Bestow has partnered with Empathy to help you support your loved ones in all the ways that matter. We teamed up to give your beneficiaries (up to 10 loved ones) access to digital support tools to help the min the toughest times. From logistical tools like helping navigate probate and settling an estate to emotional tools like grief resources and meditation exercises, Empathy provides 24/7 digital access for your beneficiaries to navigate life after loss.

  Empathy is a platform made free for the beneficiaries of the policyholders with Bestow. Empathy is available to policies issued in the following states: AL, AR, CA, FL, GA, ID, IN, IA, KS, ME, MS, NE, NV, NH, NM, ND, OH, OR, VT & WV. Empathy offerings are not guaranteed to continue. We reserve the right to elect, designate, replace, or terminate Empathy services at any time. Empathy is a non-affiliated 3rd Party platform.

  What Happens If I Don’t Die?

  Cheers to good health! Term life insurance policies do not build cash value like a whole life policy does, so if you outlive your policy term, you won’t get anything back. Term life policies do not renew. At the end of your term, you can re-apply for a new policy.

  What If I Still Have Questions?

  No worries. We’ve got your back. You can contact our Customer Care Team in three different ways:

  1. Give us a call at 800-835-8803.
  2. Ask us a question via chat — that little box floating about the page.
  3. Send us an email at [email protected], and a Customer Care Advisor will get back to you. Please do not include personal information, like your Social Security Number.

  Or if you prefer a DIY approach, you can check out our Bestow FAQ. There’s no such thing as a silly question, so don’t hesitate to reach out. We’re happy to help.

  Ready to get a quote? Apply for up to $1.5 million in term life coverage with Bestow.

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  Bestow Team | 4 min

  Author: Bestow Team, reading time: 4 minutes

  No Medical Exam Life Insurance: What to Know

  Between work, home repairs, and a to-do list that never seems to shrink, it can feel like there is no time for extras. It’s safe to assume that most people would prefer not to take hours out of their day to get a life insurance medical exam. If this is the case, then why do most insurance companies require it?

  The life insurance industry is not just old, it's centuries old. In fact, the first life insurance policies in the U.S. were written in the 18th century. Obviously, we didn't have the technology then (or even just a few years ago) that we do now, so medical exams have been a necessary step in the underwriting process. But times have changed, technology included. Is it still necessary to undergo a medical exam to buy life insurance? For some, the answer is yes, and for others, no. As a consumer, you have options.

  What is No-Medical-Exam Life Insurance?

  No-medical exam life insurance is exactly what it sounds like: a life insurance policy that does not require a medical exam to apply.

  The traditional way of applying for a life insurance policy can involve medical exams, lab tests, and in-person interviews. With this traditional underwriting process, you might find yourself waiting up to a month to get a decision.

  Accelerated underwriting uses technology to make the process of applying for life insurance more efficient. As in, an application decision and knowing if you are eligible in minutes - not weeks. Pretty cool right?

  As with all types of life insurance coverage, whether or not a policy is a right fit for your needs depends on, well, your needs. Some may have higher premiums, some may have differences in the application process. There are a lot of options. Here, we've gathered some helpful info on some of the most common life insurance coverage options which may not require a medical exam.

  What Are the Different Types of No Medical Exam Life Insurance Policies?

  Term life insurance can be a solid choice for many families because of its simplicity and affordability, but there are a few other types of no medical exam life insurance options, as well.

  

  No-Medical Exam Term Life Insurance With a Fast Decision

  With this option, instead of bloodwork and a medical exam, applicants will answer health and lifestyle questions and provide information about their medical history to see if they qualify for a policy.

  Simplified Issue Term Life Insurance

  In some ways, simplified issue is similar to the above. There's no medical exam, and you'll instead provide information about your lifestyle and general health, including disclosing any medical conditions you may have. It's an option worth considering if you're generally in good health and looking for fast coverage.

  One key difference, though, is just how much life insurance coverage you can get. Simplified issue insurance typically caps off around $100,000 (although some life insurance providers do offer more coverage). Plus, a simplified issue policy may have graded death benefits, which means that your beneficiaries only get the full value of the policy if you pass away at least two years after you purchase.

  Because there are minimal questions and quick coverage, the cost for simplified issue policies will typically be more expensive than both no-medical exam or traditionally underwritten life insurance.

  Guaranteed Issue Life Insurance

  Guaranteed issue life insurance is a kind of whole life insurance policy (a type of permanent life insurance) that doesn't require any health qualifications. There are no medical exams or health questionnaires. The coverage amount is quite limited though - usually between $2,000 and $25,000 - typically enough to serve as final expense insurance.

  Guaranteed issue coverage is typically purchased by people who can't qualify for any other type of life insurance. If you are approved for guaranteed life insurance, your policy will likely have a waiting period before your benefits go into effect, typically two or three years. You would pay your premiums during this time but if you were to pass away during the waiting period, your beneficiaries would not receive the death benefit.

  Group Life Insurance

  Your employer may offer group life insurance with a coverage amount equal to your salary. This coverage is generally inexpensive or free and there's usually no medical exam. It's a nice perk if you can get it, though it's important to remember that you usually can't take your coverage with you when you leave the company.

  Moreover, some people find that a simple one-time salary replacement is not an adequate amount of coverage. You may be able to purchase extra coverage through your employer, but consider getting a quote for a term policy before you do. You may be surprised at how much coverage you can get for the same price.

  Who Can Buy Life Insurance Without a Medical Exam?

  Generally speaking, healthy adults between the ages of 21 and 45 may be eligible to buy a term life insurance policy online. (Bestow can underwrite policies for individuals ages 18 to 60, for terms of 10 to 30 years in five-year increments, if approved.)

  No one will vet your yoga class attendance record or that marathon sticker on your Subaru's rear window. But if you are in overall good health, a no-medical-exam life insurance policy might be the right fit for you.

  However, there are certain criteria that may prevent you from purchasing a policy without a medical exam. If you have a serious medical condition (such as heart disease, cancer, kidney disease, or blood pressure issues) or risky hobbies (like hang gliding, for example), you might need to speak to a licensed insurance agent to help you find a life insurance policy that fits your needs.

  How To Get a Fast, Free Quote Right Now

  Bestow offers term life insurance for today's busy families. We believe that everyone should have access to the financial protection that life insurance can help provide, and that it should be convenient, affordable, and fast.

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  Bestow Team | 6 min

  Author: Bestow Team, reading time: 6 minutes

  How Much Life Insurance Do You Need?

  Ah, yes. The $50,000 question. Or is it the million-dollar question? Suppose it depends on your policy (that’s a little insurance humor for you).

  If you’re considering purchasing a life insurance policy, chances are you’re looking for a way to provide support for your loved ones should you pass away. When determining the amount of life insurance you need, you’ll want to think not only about your financial circumstances but also those of the beneficiaries you intend to name. 

  What Can Life Insurance Pay For?

  The short, simple answer is anything. When beneficiaries receive a death benefit, it’s up to them how to spend it. There are no restrictions around a beneficiary’s usage of a life insurance payout.

  When you set up life insurance coverage, you might want to sit down with the people you plan on naming as beneficiaries and discuss your intentions, especially if you are the financial planner of the family. 

  Though there are no rules, here are some examples of ways people use life insurance payouts: 

  • Mortgage: When calculating the ideal amount of life insurance coverage, some people will include the amount of their mortgage in the equation. Death benefits can be used to pay off a house or property.
  • Debt: Welcome to adulthood; there are no cookies here but we do have debt. Whether it is student loans, a half-paid-off car, or credit card debt, beneficiaries can use the tax-free life insurance payout they receive from your policy to pay off any debt you leave behind or to pay down debts of their own.
  • College education: If there are kids in the picture, life insurance payouts can be used to cover tuition and other educational expenses.
  • Income replacement: The loss of a financial contributor, whether considered the head of household or not, can be devastating. Life insurance payouts can be used to help your family keep up with the cost of living should you pass away unexpectedly.
  • Childcare: Whether you are a stay-at-home parent or work full-time, consider the cost of childcare for your family should you pass away. 
  • Final and future expenses: Death isn’t fun to think about, but being prepared for the unthinkable can help offer some peace of mind. Your beneficiaries might use their death benefit to cover your final medical bills, pay for your funeral (around an $8,000 average expense), or cover the cost of a move should they decide to relocate. 
  • Gift: Maybe you’re covered in the debt and expense department (#blessed). You can still use life insurance as an added comfort for your loved ones, dependents or not. If you’re a business owner, you might name a business partner as your beneficiary to cover the cost of carrying on the company once you’re gone. Some people choose to leave a legacy by naming a non-profit organization as their beneficiary.

  Diagnosing Your Coverage Needs

  Wouldn’t it be nice if you could just Google “how much life insurance should I have?” and the exact amount would appear on your screen? Maybe in the future, when cars fly and dishwashers have a put-away cycle, but for now, there is no clear consensus amongst financial advisors. But one rule of thumb you can use to help diagnose your potential needs is that coverage should be six to twenty times your annual income (helpful wide gap there we know).

  When calculating the amount of life insurance coverage you need, you might consider the following.

  Your Family’s Monthly Expenses

  Monthly expenses vary from family to family. Maybe yours lives on a sustainable farm with solar panels. Perhaps you just bought your first house and have three kids with extracurricular activities. 

  Either way, it’s a smart idea to use your personal circumstances to figure out how much life insurance coverage you need. More so, imagine how your family would cover expenses if you were gone. Are you the primary caretaker, the main breadwinner, or a combination of both?

  Here is a list (not exhaustive, but pretty close) of things to consider:

  • Mortgage or rent
  • Car payments
  • Childcare ($8,355/yr average per child, and more in many places)
  • Housekeeping (it’s tough to do it all)
  • Utilities
  • Education (school supplies, college tuition,etc.)
  • Food 
  • Healthcare and insurance (your partner’s life insurance, medical insurance, homeowner’s insurance, car insurance)
  • Entertainment (might seem silly to think of but happiness is something to consider in these situations)

  Add Up The Cost Of Your Financial Obligations

  After you’ve made your list, ask yourself: Did we miss anything?

  Whether it’s debt, a monthly bill you rarely think about, or the cost of your parent’s apartment in an assisted living community, jot it down with an estimated dollar amount.

  Total Everything Up

  Add your monthly expenses to your debt and then factor in any additional financial components that made it onto your list. Write that number down.

  Next, determine how many years of life you want to help cover with this insurance policy. One way to do that is to subtract your current age from your planned retirement age. Now take that number and multiply it by your annual salary (it’s a bit of math, but it’s worth it!). 

  How do you feel about that figure? Does it seem like the right amount of coverage? Would it cover the amount you wrote down earlier? Are there any factors that were left off that list that you would like to consider? 

  We would love to give you clear direction here, but alas, we can only offer guiding questions. Figuring out how much life insurance you need is a personal quest. Feeling overwhelmed or unsure about selecting a coverage amount? It might be a good idea to consult with your friendly neighborhood financial planner. 

  

  What Are The Different Types of Life Insurance?

  If you were today-years-old when you found out there is more than one type of life insurance, you are not alone. While there are many, many varieties, there are two main types of life insurance: term life insurance and permanent life insurance. The latter has a few subtypes, including whole life insurance and universal life insurance. 

  Policy Type	Term Life Insurance	Whole Life Insurance	Universal Life Insurance
  Policy Length	Coverage for a specific amount of time	Coverage for your whole life (hence the name)	Coverage for your whole life (hence the name)
  Features	Tax-free death benefit with no cash value	Tax-free death benefit and cash value that accumulates tax-deferred	Tax-free death benefit and cash value that accumulates tax-deferred

  Which Type Of Policy Is Best For You?

  Though they can guess your age and zodiac sign, the online quiz makers have yet to crack the life insurance policy code. And that’s just as well, because picking out a policy is a big (and deeply personal) decision. Ultimately, you’ll want to factor your age and current financial situation into the decision-making process.

  Term life insurance typically offers smaller premiums than permanent life insurance, but it does not offer the cash value option that may be of interest to some. While whole life and universal insurance provide coverage for the extent of your life, term life insurance covers your life for a predetermined length of time, usually anywhere from five to 30 years. 

  A Few More FAQs

  Who Needs Life Insurance?

  It’s certainly not anyone’s favorite pastime, but if you take a moment to picture what life would look like should you pass away, that vision will give you an idea of whether or not you need life insurance. If you have children, a partner, or people who rely on you financially, you might need life insurance. Likewise if you carry a mortgage, have debt, or own a business.

  If you’re financially well off and have far more assets than debt or expenses, or you are just starting adulthood, you may not need life insurance. However (and this a pro-tip), keep in mind that the younger and healthier you are when you initially purchase life insurance, the more affordable your premiums will generally be for the life of the policy.

  What Determines Life Insurance Rates?

  When you apply for a life insurance policy, the insurer will use a few factors to calculate your insurance rates. They will likely consider your age, health, lifestyle, and smoking habits. Many life insurance companies require a medical exam and blood sample to purchase coverage while others skip that process and instead use technology to scan your medical history to determine eligibility and rates.

  Finding The Best Life Insurance For You

  If you want to further explore life insurance coverage costs, you can get a free quote in seconds here. You’ll just enter your gender, birthday, height, weight, and zip code. From there you can explore different term periods and coverage amounts t to get an idea of what your monthly cost might be with a policy underwritten by Bestow. 

  Bestow offers term life insurance coverage of up to $1.5 million and applying for a term policy is nearly as simple as our quote process. There are no medical exams or no blood samples required – with Bestow, you could have life insurance coverage in minutes, if approved. 

  Bestow does not give tax or legal advice. The information provided is not intended to offer any tax, legal or financial advice. It is always a good idea to consult your tax, legal and financial advisors regarding your specific situation. Our application asks about your lifestyle and health to determine eligibility in order to avoid requiring a medical exam. 

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  Bestow Team | 7 min

  Author: Bestow Team, reading time: 7 minutes

  Whole vs. Term Life Insurance: What's the Better Option for You?

  Life changes quickly, especially if you’re just now starting your adult life. Perhaps you’ve recently tied the knot or a little mini-you is on the way (congrats!). In either case, your financial situation is likely to change drastically over the next couple of years, never mind decades. So, too, will your insurance needs. 

  You may be wondering what the difference is between a whole life vs term life policy. Before we get into the nitty-gritty of which one might work best for you, let’s look at what term and whole life insurance coverage have to offer. 

  • There are benefits and drawbacks to each. 
  • Term life insurance is typically more affordable, while whole life doesn’t expire after a set period of years – but it’s more expensive. 
  • Both options have merit – and the choice depends on what you value for your loved ones. 

  Article Highlights

  • Term insurance v. Whole Features
  • Term insurance v. Whole Cost Comparison
  • Choosing Term or Whole
  • Other Life Insurance Options

  High-Level Differences Between Term and Whole Life Insurance

  The two basic types of life insurance are term and whole, which differ in length of coverage. Term lasts as long as you’ve agreed with your provider. Whole life can offer a guaranteed payout upon your death. But it’s not as simple as selecting a sure thing. 

  Term Life Insurance – This is designed to provide ample coverage at a time when you’re most financially vulnerable. And because it expires at the end of your term, it costs significantly less than a whole life insurance policy. 

  Whole Life Insurance – Because whole life insurance is in force for as long as you’re alive (and pay your premiums), your beneficiary will always receive the death benefit, no matter how old the policy. This can mean fairly intimidating premiums for some applicants.

  What Is Term Life Insurance? 

  A term life policy covers a specific time period and is intended to provide death benefits in the event of premature death. While you must keep up with monthly premium payments, it only retains value if you pass away during the term.

  The Benefits of Term Life Insurance

  You know yourself best. Term life insurance coverage is a great option for most American adults, especially if you have a tight budget. With a term policy, you’ll enjoy the benefits of: 

  • Choosing your term length. Perhaps 30-years makes sense if you’ve taken out a mortgage. Or a 20-year term suits someone who just had a baby. 
  • Getting more affordable rates that comfortably fit into your monthly budget. 
  • Some degree of financial resiliency should you pass prematurely during your term. 
  • Oftentimes, no exhausting, intensive application process – even sometimes skip the medical exam. 

  Drawbacks of Term Life Insurance 

  While the lower price and flexible terms can make term enticing, there are a few reasons to think twice about your choice. 

  • The life of your policy expires at the end of the term. You can’t always add on coverage, but often must reapply, with new rates. 
  • If you do outlive the term, without a return of premium rider (a more expensive agreement where your premiums are returned to you at the end of your term), the money you’ve paid for a number of years is gone. 
  • You can sometimes add a return of premium rider to your policy that you get part or all of your premium payments returned back to you. However, these policies are more expensive. 

  What happens to term life insurance at the end of the term? 

  At the end of a term, a policy simply expires. Policy holders sometimes have the chance to re-up their coverage, but not always. Ideally your major expenses are paid off, the kids are on their own, and the financial peace of mind you get from insurance is no longer necessary.

  

  What Is Whole Life Insurance? 

  Whole life insurance is exactly what it sounds like: it’s insurance that lasts for your whole life (except it’s actually more complicated than that). It’s often called permanent life insurance, for obvious reasons. 

  • You get lifelong coverage, which provides a payout to your beneficiaries on your eventual death. 
  • May include an investment component with policy cash value – and this is generally tax-free money. 
  • You can often borrow against the account for major or unexpected life expenses. 
  • And some policies allow you to sell or transfer ownership – where someone else pays your premiums and collects the death benefit. 

  A little more on the cash value: these are the “living benefits” provided by whole life insurance. A part of each premium payment contributes toward growing the policy’s cash value. You can tap into your cash value to take out a loan, pay your premiums, or surrender the policy for its cash value amount. 

  Benefits of Whole Life Insurance 

  Outside the obvious appeal of the cash value benefit, a whole life policy is a great choice for individuals looking for a guarantee, and want the financial protection that comes from knowing you have a policy to last your entire life. 

  • There’s no term. It is permanent coverage as long you’re making payments. 
  • Just like term life, the death benefit is guaranteed to be paid out tax-free to your beneficiaries if you die within the term period (and claim is approved). 
  • Premiums grow tax-deferred cash value from which you can withdraw or borrow. 
  • Guaranteed death benefit as long as you make payments 
  • Premiums can build cash value and the policy’s cash value grows with time

  Drawbacks of Whole Life Insurance 

  It should be clear by now that for many people seeking life insurance, the appeal of whole life is often tempered by the cost. 

  • You’ve got to pay more in order to get more out, so you’ll pay higher premiums. 
  • Many surrender their policies and incur fees to cancel their coverage. 
  • Using the cash value can reduce the death benefit (if loans are not paid back), subject you to taxation, or result in the surrender of the policy. 
  • You may find yourself making large payments for a policy you don’t really need in your later years. Your beneficiaries may have acquired wealth. They may proceed you in death. Your mortgages and other debts may be paid.

  Comparing Term vs. Whole Life Insurance Policy Coverage 

  Let’s look at what term and whole life insurance offer side-by-side for a clearer picture. There are trade-offs with selecting either, but once you’ve decided what’s most important you can begin to balance some of those tradeoffs.

  Comparing Cost of Term and Whole Life Insurance 

  Policy Features	Term Life Insurance	Whole Life Insurance
  Length	1-30 years	Entire life
  Cost	$25-35/mo on avg.	5-15x the $$ of term
  Death Benefit	Yes	Yes
  Cash Value	No	Yes
  Cash Value Growth	n/a	Grows at an established rate
  Premium variability	Fixed or variable	Fixed

  A whole life insurance policy can cost 5 to 15 times as much as term. But if you start adding riders and other insurance options to a term life insurance policy, your life insurance premiums can still increase significantly. 

  Term life insurance policies are a good option if you only need life insurance to replace your income over a certain period, such as the years you’re raising children or paying off your mortgage. It’s going to be your most affordable coverage. 

  With whole life or entire life insurance costs being out of reach for some, choosing term is a way for even those with little money available for premiums to manage some level of coverage for their family. And if your circumstances change, many term policies offer the option to convert to whole. 

  But whole life can make a lot of sense for some people who simply can’t imagine all of their premium payments being sunk costs. Others want a low-risk means of passing on tax-free wealth to their heirs. (We strongly recommend consulting a financial advisor on how an insurance policy might fit into your financial plan.) 

  If your expenses or debts aren’t short term, permanent life insurance can make sense. A family with a dependent child may choose whole life to help fund their care. 

  And of course, it’s possible that you just want to ensure your final expenses aren’t a burden on your family, but you want to blow all your own hard-earned money sipping piña coladas on a remote beach before you go. 

  Life Insurance FAQs

  What does life insurance cover? 

  Life insurance covers any financial needs encountered by those who may have depended on your income should you pass away. At a minimum, it can help with funeral costs and final expenses. 

  How much does life insurance generally cost? 

  Term policies can be as little as $1/day, depending on several factors including courage amount, term length and your answers to health and lifestyle questions. Whole life can have a 5-15X higher cost. 

  Can I convert a term life insurance policy into whole life insurance? 

  Some term life policies allow policy-holders to convert their policy into a form of permanent life insurance, often without further medical exams. You should ask this of your insurer before purchasing a policy. 

  Which one is ultimately better? 

  There is no “better” type of policy, only a “better-for-you” policy based on your family’s unique needs. 

  Get Your Free Life Insurance Quote 

  You can get a term life insurance quote in seconds and apply for a term life insurance policy with Bestow. Most get a decision in just minutes. It’s entirely online if that’s what you’re into. If not, we have licensed, non-commissioned agents standing by to help advise you. It’s entirely up to you. You can chat online or schedule an appointment to talk to a real person. 

  There’s no better day than today to start looking at your insurance coverage options and get a fast, free quote on convenient term life insurance policies with Bestow. Taking the first step might provide you with some peace of mind. And applying for coverage might provide your family with financial protection in the future. 

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  Bestow Team | 4 min

  Author: Bestow Team, reading time: 4 minutes

  Who Needs Life Insurance – How It Works, and When You Should Have It

  In the event you’re not around to provide for your family members, the death benefit from a life insurance policy may leave your loved ones with some degree of financial security. And for a lot of people, especially parents, that peace of mind is priceless.

  You’ll have plenty of options when selecting life insurance from different face values and term lengths to riders and even policies that hold cash value. At the end of the day, the choice is personal, but knowing about all of your options can give you more confidence to finally purchase that policy.

  How Life Insurance Works

  In short, you pay a life insurance company a set amount of money each month (that’s the premium) for an agreed upon amount of time (that’s the term). If you pass away during that term, the insurer pays your beneficiary (the person you choose to receive the benefit) the life insurance payout.

  The payout is typically tax free, and many view it as income replacement. Others plan for it to cover daily living expenses, a mortgage, or even fund higher education. You can name nearly anyone as your life insurance beneficiary and they can spend the money however they need it.

  It really can be that simple. You continue to pay your insurance premiums on time each month, and you can feel good about the financial protection you are providing your family should they ever need it.

  Start with a quote.

  Who Needs Life Insurance?

  Most people start to think about life insurance when they start a family or buy a home, but the truth is, it’s always a smart time to start buying life insurance. That’s because, typically, the most affordable time to buy is now. For most people, life insurance rates get more expensive as you age.

  Anyone with someone who depends on their income is a good candidate for life insurance.

  1. Parents

  Having kids means having bills, from early childcare costs for young children to higher education for older kids. Their financial needs are unpredictable and often come by surprise.

  2. Spouses or Partners

  From living expenses to outstanding debts and even private student loans, the loss of a loved one could be compounded by crushing financial burden. That’s to say nothing of the funeral expenses and other final expenses that face those left behind.

  3. Stay at Home Parents

  Stay at home moms and dads contribute a significant amount of non-paid labor in a home. While not typically viewed as financial support, the value of this work can easily be in the six-figures. Life insurance can help to cover the costs associated with childcare, home maintenance and more.

  4. Small Business Owners

  The terms of a small business loan often require life insurance, but having coverage can also solidify a commitment to employees, business partners, and small business cosigners, whose livelihoods may depend on your contribution to the company.

  5. Retirees

  Even if you were offered life insurance through work, that typically vanishes when you leave a job. Many retirees live on a fixed income and when a spouse or partner passes, a life insurance policy can ensure the other lives out their days comfortably.

  6. Anyone with Shared Debts

  If you and your spouse’s names are both on the mortgage, if your parents cosigned your student loans, or if you share a credit card, you may be leaving loved ones responsible for debt they aren’t able to pay off.

  Watch this video to learn more about who might need life insurance.

  

  Who doesn't need life insurance?

  If no one in your life depends on you for any financial support, you may not need life insurance coverage right now. But there’s no harm in looking at life insurance quotes today.

  If you work with a personal finance advisor, it’s likely they’ll bring up life insurance while you are young, if they think you may need life insurance in the future. That’s because, in most cases, life insurance will never be as affordable as it is today. Yup. Right now. Your premium rate is determined by a number of factors including your age and health, often with a medical exam. The rate you get at 25 will probably differ significantly from the rate you get at 35.

  What Kind Of Life Insurance Is Best For You?

  Once you’ve got an idea of the amount of life insurance you need, you’ll need to understand which type to buy. There are several types of life insurance coverage with differing amounts of coverage, policy lengths, and even add-ons. Let’s break it down.

  Whole Life Insurance

  Whole life insurance (or permanent life insurance) is a policy you purchase and pay premiums on for the rest of your life. When you pass, as we all do, your beneficiaries receive a payout.

  A whole life insurance policy might be right for someone hoping to transfer wealth to their children. Or people who expect to have mortgages into old age. It is almost always more expensive than a term policy because it, at some point, will pay out.

  Read more about the differences between term and whole life insurance here.

  Term Life Insurance

  Term life insurance policy is a great choice for people looking for more affordable rates and happy to have coverage for a set number of years (like 5, 10, or even up to 30).

  You can usually find out a more flexible policy with competitive rates for the years when your death would most impact your family (duration of a mortgage, children graduating, etc.)

  Watch this video to learn more about how much insurance you need.

  Buying Your Life Insurance Policy

  Whether you’re looking to shore up your long-term financial plan or you’d just rest a little easier knowing you’ve done something that may help your family, life insurance is now a relatively easy place to start. With Bestow, you can get a fast, free quote in seconds. The full online application literally takes minutes, and you could have coverage today, if approved. Peace of mind could be just a few clicks today. So what are you waiting for? Get started today.

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  Bestow Team | 6 min

  Author: Bestow Team, reading time: 6 minutes

  Life Insurance Calculator: What Factors to Consider

  So, you’re looking to protect your loved ones with life insurance coverage if you’re not around to provide for them. Smart move. Life happens and a life insurance policy can help us feel better about the unexpected.

  You’re probably curious what life insurance costs, and what you get for the money. By comparing several carriers and deciding which plan works best for your family, you can typically find coverage that fits your budget.

  How Much Life Insurance Do I Need?

  Several factors can contribute to the amount of life insurance you need. From your current financial situation to your future financial obligations. Are you looking for several years of income replacement or aiming to cover specific future expenses like housing, education, or child care.

  There is no one-size-fits-all formula when trying to determine the coverage your family needs. But there are several common methods to calculate your coverage.

  • Income multiplier – Advisors typically recommend 5-10X your annual salary, and often adding an additional $50,000 -$ 100,000 for each child
  • Debt estimation – Here, you tally the outstanding debt you have (mortgage, student loans, credit cards) and add the cost of final expenses with any additional expenses you want to cover (ie: children’s college).

  Deciding Your Type of Life Insurance

  There are two primary types of life insurance: whole and term. The basic differentiators are how long they cover you and how much they cost. But the reasons you choose between life insurance products are very personal and based on your family’s life insurance needs.

  Whole Life Insurance

  Whole is often referred to as permanent or universal life insurance. You purchase it today and when you pass (which, spoiler, you inevitably will) your beneficiaries get a payout. Because the death benefit is guaranteed, the price you pay is typically significantly higher than a term policy.

  Term Life Insurance

  Term life insurance lasts as long as you and the insurer agree. You can purchase policies for 20 years. or more commonly, 30. You decide how much insurance coverage you need and the term length and make payments for the duration of the term. When it expires, so does your coverage.

  The money you’ve paid in does not get paid out. That’s what usually makes this option far more affordable for most families. And it’s a great way to cover the length of a mortgage or the time period your children depend on you financially.

  

  What’s The Average Cost of Life Insurance?

  Insurance rates depend on a variety of factors, including your age, health, how much life insurance coverage you need, and of course where you buy.

  A $500,000, 20-year term life policy for a healthy 35-yr old female may be had for under $30/mo. with some carriers (As little as $22.97/mo. at Bestow*). That’s less than $1/day. But if you’re looking for a larger policy, around $1 million, and want 30 years of coverage (the length of your mortgage, for instance) you’ll likely find yourself paying much more. 

  Whole life insurance can be 3-5X more expensive. That’s a big gap, and why you should consider getting a few different quotes.

  How We Calculate Your Life Insurance Cost

  Bestow uses thousands of data points to determine eligibility and rate, including everything from your health history to your risk factors (do you recreationally pilot planes?).

  You’ll get a preliminary quote based on your gender, age, and preliminary health data. You can explore your options by tinkering with term length and coverage amount.

  Age

  The younger you are, the more likely you’re in prime health. And the farther from death you are. You’re more likely to get our most affordable rates in your 20s. But your annual income usually increases as you age, so you’ll want to reevaluate your needs over time.

  Gender

  Women typically pay a little less than men for life insurance simply because the data shows they have a longer life expectancy.

  Health & Lifestyle

  Insurers will ask a variety of health and lifestyle questions to determine if you’re eligible for coverage and how much you might be eligible for. Not everyone qualifies for the same coverage.

  Term Length

  The longer you want to be insured, the more a policy will cost. You’ll age more in a 30-year policy than in a 10-year and the insurer is taking on a greater risk. You’re still likely to get a lower rate by buying a 30-year policy at 25, than a 20-year at 35.

  Coverage Amount

  You get what you pay for. If you want $1 million, you’ll pay a larger monthly premium than if you select a $50,000 policy (or even smaller to simply cover funeral costs). If you’re looking to cover credit card debts, future educational needs, student loans, housing or more, you could find yourself easily paying more than a hundred dollars a month, possibly several hundred for whole life insurance.

  Example Life Insurance Calculation

  There are two commonly used ways to calculate desired coverage. 

  The first is income multiplied. This can range anywhere from 5-10X your annual salary. The biggest factor in determining this is often how much income a spouse or partner provides in relation to cost of living expenses. The primary breadwinner may opt for 10X salary + up to $100k for each child to ensure their unexpected needs are covered. While a partner who contributes less may elect for less coverage.

  A more exacting way many advisors use to recommend coverage amounts is called the D.I.M.E. formula and involves a little math. When you’re calculating the amount of life insurance coverage you need, start with all the relevant numbers. It will help to have a pretty good sense of your family’s financial assets and needs, including the following:

  Annual salary for each adult in the household

  Debts and Expenses

  • Mortgage balance
  • Annual childcare costs
  • Credit card debt
  • Other personal loans
  • Expected final expenses

  Future expected costs

  • Higher education expenses
  • Miscellaneous living expenses

  Then grab a calculator. The D.I.M.E. formula stands for debt, income, mortgage and education.

  • Debt and final expenses: Add all your debts, excluding mortgage, then add funeral expenses.
  • Income: Determine the number of years your family would need support, then multiply your annual salary by that number.
  • Mortgage: What is the outstanding amount due on your mortgage?
  • Education: Do you plan to fund your children’s K12 or higher education? Cost for 4-year public universities can exceed $150k.

  After you’ve calculated your needs, level set by accounting for your savings, retirement accounts, and existing life insurance (from work or a veterans organization). There may already be money coming to your family without your salary contribution. Subtracting that amount from your expenses can lower the amount of coverage you need and dramatically reduce your premiums.

  Also consider your desired term length. If you’ve got small children or a recent mortgage, a 30-year policy might be right. If you’re a little older and have teenagers or 20-something children, without major debt, consider a term length that matches your expected retirement date (when your IRA or retirement savings account might kick in). Term length will have an impact on premium price.

  Lastly, remember that stay at home parenting has a real value. A recent study by salary.com estimated the value of childcare, home keeping, meal planning, cooking and cleaning at as much at $184,820/annually. Often, stay at home parents don’t qualify for life insurance without an income. But at Bestow, lack of income isn’t necessarily a disqualifier. And women (both working and in the home), despite reporting lower incomes than men, routinely purchase more insurance coverage (as a percentage of their income).

  Financial advisors universally agree on one thing: some coverage is better than none. Even if it’s just enough to soften the blow of your loss and ease the financial burden of your financial expenses. 

  Having a life insurance policy is important, and if you discover later that your life or needs have changed, you can purchase more coverage (or with some carriers, increase your coverage).  

  Start Your Life Insurance Calculation with a Free Estimate

  Don’t let the math intimidate you. Get started today with a fast, free term life insurance quote from Bestow in just seconds. Easily get a sense of what you might pay for varying amounts of coverage.

  
  

  1Quote shown is an estimate based on a healthy, non-smoking 35-year old female (12/8/2022)

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