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ClearValue Lending

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Life Insurance

Term life, whole life, universal life — ranked by carrier financial strength rating, conversion options, and underwriting friction.

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What to know before you compare

Life insurance splits into term (cheap, time-limited, the right product for most households with dependents) and permanent (whole / universal / variable — expensive, lifetime, with cash-value features that mostly favor the insurer). The math overwhelmingly favors term life for income-replacement needs; permanent products are right only for narrow estate-planning use cases at high net worth.

Carrier financial strength rating (A.M. Best A+ or better) matters more than headline rate quotes — you're betting on the carrier being around to pay decades from now.

Frequently asked questions

What is the difference between term and whole life insurance?+

Term life insurance covers you for a set period — often 10, 20, or 30 years — and pays a death benefit only if you die during that term; it has no cash value and is the lower-cost option. Whole life is permanent coverage that lasts your lifetime and builds cash value over time, but costs substantially more. Term suits most income-replacement needs; permanent policies fit narrower, longer-term planning goals.

How much life insurance do you need?+

A common rule of thumb is roughly 10 to 12 times your annual income, but a needs-based calculation is more precise: add income replacement for your dependents' years of reliance, outstanding debts like a mortgage, future obligations such as education, and final expenses, then subtract existing savings and coverage. The right figure is highly individual, so many people use a needs analysis or speak with a licensed agent.

Why does an insurer's financial strength rating matter?+

A life insurance policy is a long-term promise — the carrier may need to pay a claim decades after you buy. Independent agencies like A.M. Best, Moody's, and S&P rate insurers on their ability to meet obligations. A high rating signals the company is more likely to remain financially sound to pay future claims. Many advisors prioritize strong financial strength ratings over a slightly cheaper premium from a weaker carrier.

Does life insurance require a medical exam?+

Not always. Many traditional policies use a paramedical exam to set rates based on health, which often yields lower premiums for healthy applicants. No-exam and simplified-issue policies skip the exam using health questionnaires and data checks, trading convenience for typically higher cost or lower coverage limits. The best fit depends on your health, the coverage amount you need, and how quickly you want the policy in place.

Can you have multiple life insurance policies?+

Yes. You can hold more than one life insurance policy, and a strategy called laddering — stacking several term policies of different lengths — is sometimes used to match coverage to declining obligations over time. Total coverage across policies must still be justified to insurers relative to your income and financial situation. Multiple policies can also combine employer-provided group coverage with an individual policy you own.

Is term or permanent life insurance better for most people?+

For most households whose main goal is replacing income and protecting dependents during their working years, term life provides the needed coverage at the lowest cost. Permanent policies are generally suited to specific situations — certain estate-planning needs, lifelong dependents, or business-continuity arrangements. Because the cash-value and tax features of permanent insurance are complex, weighing them against a licensed advisor is wise. Individual circumstances drive the right choice.

https://clearvaluelending.com/insurance/life

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