Definition of Life Insurance

Chris HuntleyWritten by Chris Huntley, Co-Founder

Don’t know anything about life insurance?

This guide was created to help you along. 

In this quick read we’ll show you what life insurance means and why you need it. 

You’ll also learn how it works and how much it costs.

Our independent agency represents 63 life insurance providers and all our agents offer at least a decade of experience. If you have questions, we can help. 

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Here’s what we'll cover in this post:

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Life Insurance Defined

A life insurance policy is a contract between you and the life insurance company. You choose the type of policy you want and the amount of coverage. You choose the life insurance company where you want to buy the policy.

Then, you submit an application. You will generally be required to either answer a questionnaire or be required to take a medical exam. Based on the results of this medical information, you will be rated from the information provided and if your application is approved, you will then be given a quote.

If you accept the quote, the company will process your policy and send it to you. You would choose a named beneficiary such as a family member. This could be your spouse, children, parents or anyone else you name as the beneficiary and who is to receive to receive the proceeds of the policy.

Once you sign the policy and return it back to the life insurance company, then you will be required to pay a premium. The premium can be a lump sum, an annual payment, semi-annual or a monthly payment. Once the life insurance company receives your first premium, your policy or contract comes into effect.

How Expensive is Life Insurance?

The cost of life insurance varies considerably form person to person and from company to company. Before I explain how this works’ let me give you sample quotes so you have a better idea of what a premium might cost.

I did some sample quotes for a variety of term and permanent policies (I’ll explain the difference later on in the article) to give you a rough idea of what you can expect to pay.

These quotes are for "Preferred Plus" Rates for a healthy male who is a non-smoker.

Sample Term and Permanent Life Insurance Quotes for Males

Term and Permanent Life Insurance Quotes for Males

$250,000 Policy Monthly Premium
Age20 Year TermPermanent
25 Year Old Male$12.09$82.32
30 Year Old Male$12.48$96.42
35 Year Old Male$13.11$117.27
40 Year Old Male$17.33$138.00
45 Year Old Male$26.03$167.38
50 Year Old Male$38.77$212.00

*Monthly rates are provided for illustrative purposes only and are accurate as of 07/13/2022.

As you can see, life insurance becomes more expensive as you get older.  So, it is important that you buy a policy sooner rather putting it off as that will save you money for the long haul.

Types of Life Insurance Policies You Can Buy

Life insurance is generally sold in 2 main types of formats. This includes:

Term Insurance

Term insurance is the most affordable type of policy available because it is very basic. A term policy covers death benefits only. It is sold in periods of time such as 5, 10, 15, 20, 25, 30 years or is age specific such as age 55 or 65 for example and why it is called term.

These policies are renewable and the premium is fixed for the life of the term. All you have to do is choose the amount of death benefits you need and the length of time or term you want the policy in place.

Permanent Insurance

Permanent insurance covers you for your entire lifetime. These policies are more expensive than term because they also include a cash value accumulation component which is a sort of savings or investment feature.

The 2 main types of permanent policies sold include "Whole Life’ and ‘Universal Life". It would take too much time to explain the difference in this article.

What’s the Best Way to Buy Life Insurance?

Although you can buy these policies on line, you may not really understand what you are buying and may not be getting the best rate possible. You should always use the services of an independent agent like me because we research dozens of different companies to find the most suitable policy for your particular individual situation.

Insurance companies are not all the same. They rate people differently and the premiums they charge are can vary considerably from one company to another. They also assess your health differently so it is always best to use an independent agent.

Where Can I Find an Affordable Life Insurance Policy?

You always want to talk to an independent agency like JRC. We represent 63 life insurance companies so you are assured we will find the best policy at the most affordable rates.

If you have health concerns, don’t let that dissuade you because we can give you valuable advice and help you to find a policy that suits you. Our agents are experts at matching our clients with the right coverage for their needs. 

Give us a call today at 855-247-9555, or request a free quote using our form below. Our comparative shopping services are free and there is no cost to apply for life insurance.

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Chris Huntley

Chris Huntley

Co-Founder

Chris is a co-founder of JRC Insurance Group. Prior to founding JRC, he owned his own agency, and he has been a licensed life insurance agent since 2014. Chris is a die-hard San Diego Padres fan, and in his spare time he enjoys reading, ping pong, poker, and spending time with his wife and three daughters.

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  • $50,000
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  • $150,000
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  • $500,000
  • $600,000
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  • $750,000
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