Life insurance
How it works, why you should consider it, and how to get a quote.
What ‘s life insurance? First and foremost, it’s a way to protect your family and those who depend on you for financial support. It can provide a large, income tax-free payout to help them carry on if you pass away unexpectedly — and some policies have features that can help you build family assets.¹
Get an instant Term life insurance quote
Who’s life insurance for?
If you have loved ones who depend on you for support — financial or otherwise — buying life insurance is one of the best ways to help ensure they're provided for. It can also help build and pass on family wealth and assets.2
What does life insurance cover?
It’s insurance that provides a death benefit if the policyholder passes away while the policy is in effect. It’s almost always paid out as an income tax-free lump sum and can be quite significant — enough to replace several years of lost income.
Why should I consider life insurance?
Life insurance can do more than provide income replacement for your dependents — it can be used to help build tax-efficient family assets, help assure the continuity of your business if you pass away, or even pay for final expenses.
There's no time like the present to have financial protection for those who depend on you. The younger you are, the more cost-efficient your premiums, and the more life insurance options you'll have. There are lots of reasons to buy a policy: Maybe you're changing jobs and lost your coverage through work. Or you're starting a business. Or, as a caretaker for a spouse or aging parents, you want them to have added financial protection. But many people wait until a significant life event to get coverage.
Getting married
Expecting a baby
Buying a new home
How much do you need? Get an estimate.
How much life insurance coverage you need depends on your stage of life and how many people rely on your income. We’re here to support you during these important life decisions. Our quote tool can give you a quick estimate based on certain assumptions related to your age and income.9 In general, the younger you are, and the more people depend on you, the more coverage you may want for income replacement if you unexpectedly pass away.
There are also other ways to estimate your life insurance needs; for a more personalized analysis, speak with one of our financial professionals.
FAQ
Top questions about life insurance
Life insurance can be an important step in protecting your family’s financial future and we’re here to help you make the decision that’s best for you and your loved ones. Let’s explore a few common questions so you can feel confident about choosing the option that works best for you.
According to NerdWallet, a life insurance policy in August 2024 could range from $28 (for a non-smoker) to $122 (for a smoker) per month for a 40-year-old male buying a 20-year term policy with a $500,000 death benefit, which is a common type of policy.2 But it's important to remember that when you get a quote, the rate is affected by many variables, including the life insurance company, policy type, coverage amount, length of term, gender, health status, and other factors. For example, a permanent whole or universal life insurance policy will cost significantly more because it provides lifelong protection and builds tax-efficient cash value that can be accessed while you are still alive.
A life insurance policy can help provide financial protection at any age, and it is especially important for adults with financial obligations and dependents. Consider getting life insurance sooner rather than later because, generally speaking, the younger and healthier you are when you purchase life insurance, the lower your rates will be. As you age and your financial picture changes, life insurance can provide additional benefits. For example, permanent life policies are often used for estate planning to help simplify the transfer of generational assets. There can be certain tax benefits as well, but you should always consult with a tax professional before purchasing life insurance for this purpose.
Yes, many people have life insurance coverage from more than one source. For example, if you have group life insurance coverage through work, the coverage amount may not meet your life insurance needs, so you can supplement it with an individual policy. Or perhaps you have permanent insurance that provides lifetime coverage while building cash value but has a limited death benefit for your family. You can choose to get an additional term life insurance policy that can help provide a significant income tax-free death benefit while your children are still growing up.
Life insurance death benefits are almost always income tax-free. The cash value growth of a universal or whole life insurance policy is also tax-deferred, so it can grow faster because it's not being reduced by taxes each year.
The best policy for you depends on your needs and budget. If you're looking for lifelong insurance protection that also provides cash value, there are two main options: whole life and universal life. A whole life policy offers level premiums and more guarantees, but a universal life policy can be more cost-efficient because it offers variable premiums that you can raise or lower within a certain range. The insurance company may also let you customize your policy with various provisions, such as an accelerated death (or “life”) benefit rider to pay for end-of-life needs and even certain kinds of long-term care. If you don't need permanent coverage or cash value, which can provide benefits such as policy loans, term life insurance coverage costs will generally be lower.
If you have loved ones who depend on you for income, life insurance is one of the best ways to help provide for their financial needs if you die unexpectedly. Life insurance companies also have specialized policies for customers with varying incomes and other needs, such as high-net-worth individuals looking to transfer assets more easily without incurring added estate taxes (you should always consult a professional for tax advice first). On the other hand, if you have no financial dependents or heirs you wish to provide for, life insurance may not be a priority, although you can leave your life insurance to a cause you care about.
The three main kinds of life insurance are:
Term life insurance: This type of insurance provides coverage for a specific period, usually ranging from 10 to 30 years. It is often referred to as "pure life insurance" because it does not have a cash value component. The policy pays a death benefit only if the insured dies during the term. It is generally the most affordable type of life insurance.
Whole life insurance: This type of permanent life insurance provides lifetime coverage and includes a cash value component. The premiums are fixed, and the policy accumulates cash value over time, which can be used in various ways while you are living. Because it offers cash value and lifetime coverage, whole life insurance is more expensive than term life insurance.
Universal life insurance: Another form of permanent life insurance that builds cash value, universal life offers more flexibility than whole life insurance by allowing policyholders to adjust their premiums and death benefits.
Rates vary greatly depending on the type of policy you get, your age, health, smoking status and other factors. As an example, according to Forbes, a $100,000 10-year term policy for a healthy 30 year-old woman can cost as little as $10 per month; a 75 year-old male can expect to pay an average of $145 per month, assuming he can find coverage.10 With such a broad range of average life insurance costs, the best way to estimate how much you will actually pay for coverage is by using a life insurance calculator.
Budget-friendly life insurance for individuals, families, and businesses
Guardian has been protecting people with life insurance for over 160 years. Why? With high scores for financial soundness from independent rating agencies, our 12 million customers can trust us to be there when they need us most.11 We have a five-star rating from NerdWallet, and have been named one of the best life insurance companies by CNBC and U.S. News.12 And as a mutual insurance company, we’re actually owned by our policyholders, so we can put their interests first without answering to outside shareholders.
Find out more about the value of holistic financial protection
Questions about the COVID vaccine and life insurance coverage
Applying for life insurance? What to expect during the underwriting process
Taking advantage of cash value: A guide to life insurance loans
Term vs. whole life: Advantages and disadvantages
Want to compare? A purchaser’s guide to life insurance
Disability insurance
If you’re unable to work due to injury or medical condition, where will you get income to live on? Disability insurance can help support your family when it’s needed most.
Annuities
Annuities are a financial tool that can help provide a steady, guaranteed stream of income in retirement.13
Dental insurance
Dental insurance helps keep your mouth and body healthier by covering regular preventive oral care. And it helps cover costs every time you visit the dentist — even if you need major work.
This article is for informational purposes only. Guardian may not offer all products discussed. Please consult a financial professional to understand what life insurance products are available for sale.
1,10 Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.
2 NerdWallet, Average Life Insurance Rates, Accessed August 2024
3 Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy lapses, or is surrendered, any outstanding loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 ½, any taxable withdrawal may also be subject to a 10% federal tax penalty.
4 All whole life insurance policy guarantees are subject to the timely payment of all required premiums and the claims-paying ability of the issuing insurance company.
5 Dividends are not guaranteed. They are declared annually by Guardian's Board of Directors. The total dividend calculation includes mortality experience and expense management as well as investment results.
6 Some whole life policies do not have cash values in the first two years of the policy and don't pay a dividend until the policy's third year. Talk to your financial representative and refer to your individual whole life policy illustration for more information.
7 Universal Life Insurance may lapse prematurely due to inadequate funding (low or no premium), an increase in the cost of insurance rates as the insured grows older, and a low interest crediting rate. This does not apply to universal life policies with a secondary guarantee, but if the secondary guarantee requirements are not met, the policy will most likely lapse.
8 Permanent life insurance consists of two types: whole life and universal life. Cash value grows in a participating whole life policy through dividends, which are declared annually by the company's board of directors and are not guaranteed. Cash value grows in a universal life policy through credited interest and decreased insurance costs. The cash value of both policy types benefits when the policyholder pays an amount above the required premium.
9 Calculator relies on the Human Life Value estimation method. It's a relatively simple way of looking at your needs based on what you're earning now and what you expect to earn in the future, according to the following chart.
Age | Maximum Life Insurance |
18-40 | 30 times income |
41-50 | 20 times income |
51-60 | 15 times income |
61-65 | 10 times income |
66-70 | 1 times net worth |
71-80 | 1/2 times net worth |
81+ | case by case |
You can adjust the coverage amount in the quote tool to see how it affects your quote.
10 https://www.forbes.com/advisor/life-insurance/100000-life-insurance-cost/ accessed August 2024
11 https://www.guardianlife.com/financial-highlights
12 CNBC, Here are the 6 best life insurance companies of 2023, 2023
NerdWallet, Guardian Life Insurance Review, 2023, 2023
U.S. News, Guardian Life Insurance Review, 2023
13 Annuity guarantees are backed by the claims-paying ability of the issuing insurance company.
