Life insurance basics: what you need to know.
Life insurance can feel daunting. We’re here to change that.
Methodology statement
Term life insurance coverage can be an important part of your financial planning, but how much coverage should you be looking for?
Our licensed insurance agents often recommend starting by multiplying your annual income by the number of years for which you’d like to replace that income.
Everyone’s needs are different and in doing your own research, you may find financial experts and insurance agents who recommend multiplying income by anywhere from 5x to 12x. For this calculator, we chose a multiplier of 6x.We have an ethical obligation not to recommend more coverage than we think a person needs or can reasonably afford.
We believe 6x helps determine a reasonable coverage starting point for most of our applicants who are looking to cover funeral expenses and create a financial pad for things like housing, bills, and the day-to-day costs of life.
It’s important to underscore again that everyone’s needs are different, and that the number generated by this calculator is an estimate only. Life insurance can be a big decision, and we encourage you to reach out to a financial advisor or a licensed insurance agent if you have more questions.
Families everywhere trust Lantern.
Simple online application for fast, affordable coverage
30-day free-look period
Part of Sammons® Financial Group — member companies have been protecting families for over a century
Apply 100% online.
Wondering how to buy life insurance? You’re not alone! Every day, people who are looking to help financially protect their loved ones choose Lantern.
Premiums may start at just $11 a month, with coverage options between $100k and $1.5MM.
Most applicants will get an instant decision, and, if approved, can get same-day coverage.
No medical exam. Just answer a few basic questions about your health and lifestyle.
Cross it off your to-do list and enjoy the feeling of financial protection.
Learning Center
Glossary
When shopping for life insurance, you may run into a few new-to-you terms. Trust us, it’s not all that complicated. Here, we’ve gathered some definitions for common life insurance terms.
A statement of information made by a person applying for life insurance. It helps the life insurance company assess the acceptability of risk. Statements made in the application are used to decide on an applicant’s underwriting classification and premium rates.
The process by which a life insurance company determines whether it can accept an application for life insurance, and if so, on what basis so that the proper premium is charged.
A life insurance company employee who evaluates the risks involved in each individiual application in order to determine appropriate coverage and rates.
Life insurance which pays a benefit if the insured dies during a specified period.
Part of the insurance policy that identifies the policyholder and details of the person covered, the amount of coverage, the exclusions, and the payment mode and schedule.
Even insurance companies have insurance. Reinsurers help protect insurance company finances, including helping to manage and reduce financial risk.
Restoring a lapsed policy to its original premium paying status, upon payment by the policy owner, possibly with interest, of all unpaid premiums, and presentation of satisfactory evidence of insurability by the insured.
The payment, or one of the periodic payments, a policy owner agrees to make for an insurance policy. Depending on the terms of the policy, the premium may be paid in one payment or a series of regular payments, e.g., annually or monthly.
Time period during which insurance coverage is in effect as long as payments are made.
A policy owner is typically the payor on the policy. It can be the insured, a trust, an estate, or another person. The policy owner may exercise the rights under a life insurance policy.
The printed legal document stating the terms of insurance contract that is issued to the policyowner by the insurance company.
If we learn that the age or sex of the insured has been misstated, we will adjust the face amount to the amount which would have been purchased by the most recent premium paid at the correct age or sex. Thereafter, premium due will be based upon the adjusted face amount and the insured’s correct age and sex.
Insurance that pays out a sum of money (death benefit) upon the death of an insured person in exchange for premiums.
Whether you purchased a 10, 15, 20, 25, or 30 year term, the premium (payment amount) will stay the same during that period of the term.
The termination of an insurance policy if premium is not paid by the end of the grace period.
The insurance company that contracts to take on the risk of compensating for losses in the event of death within the contract.
The person whose life is covered under the policy.
When any person would suffer a financial, emotional, or any other type of loss because of the death of the person insured. An insurable interest is required when purchasing life insurance on another person.
The value of a policy to be provided upon death of the insured, also referred to as death benefit.
The date on which the insurance coverage under your policy ends.
The length of time (60 days) after a premium is due and unpaid during which the policy remains in force.
A certain amount of time provided (usually between 10-30 days) to a policy owner in order to examine the insurance policy and if not satisfied, to return it to the company for a full refund. At Lantern, we offer a 30-day free look period.
The amount payable at the death of the insured.
A person who relies on another, especially a family member, for financial support.
The cases for which the insurance company does not provide coverage.
A statement or proof of your health, finances, or job, which helps the insurer decide if you are approved for life insurance.
The person who will receive your life insurance benefits if your primary beneficiary dies before you. This is also known as a secondary beneficiary.
A formal request to an insurance company asking for a payment based on the terms of the insurance policy.
According to the World Health Organization, BMI is a simple index of weight-for-height that is commonly used to classify underweight, overweight, and obesity in adults.
The contestable period is the 2 years between the effective date of the policy and the date of death of the Insured. Refer to the Incontestability clause in your policy for additional details.
An individual who is licensed to sell insurance policies on behalf of one or more insurance companies.
The person designated by the policy owner to receive the insurance proceeds at the death of the insured. This is also know as a primary beneficiary.
Start with a fast, free quote.
Get a quote in seconds. If you like what you see, complete the whole application in as little as 5 minutes.
