Life Insurance Quote Comparisons: Minimum to Maximum

Experts say you need to buy enough life insurance to pay off your debt and mortgage and replace your income with a little padding built in for inflation.

Since people make varying amounts in income and carry varying amounts of debt, the minimum and maximum amount life insurance companies allow make for an interesting topic.

But before we discuss what the companies will or won’t allow, let’s look at how life insurance companies measure policies in terms of CPU, or Cost Per Unit.

One unit of coverage is $1,000. So a policy worth $1 million breaks down to $0.37 per unit. A policy on the lower end, like $100,000 breaks down to $.49. The more you buy, the less it costs per unit, and vice versa. As anyone in business knows, this makes bottom-line sense.

Before we get into the minimum and maximum, let’s state the average amount life insurance companies pay out. It hovers around $600,000 ($0.45 CPU).

Minimum Life Insurance Coverage

Term life insurance policies offer lower coverage amounts than premium ones like whole insurance. Although most life insurance companies’ lowest offer is $25,000, some do go as low as $10,000. These minimum-coverage policies don’t require any medical exam and pay out almost instantly.

Obviously, most families can’t sustain the cost of living on $10,000 or even $25,000, for very long. But minimum coverage policies do make sense for single people with no dependents, mortgage or debts.

Many singles have few obligations, so a $10,000 payout on a term-level insurance policy will cover the average cost of a funeral and spare a family from carrying that burden in addition to their grief over someone gone too soon.

Now, you can also buy a dividend-producing whole life insurance policy with lifetime coverage for as little as $10,000 as well. But you’ll be paying a lot more for a lot less in return.

Maximum Life Insurance Coverage

If you’re wondering if infinite life insurance coverage is possible, the answer is yes. But before you start shopping for online life insurance deals with those kinds of payouts, you need to know that most life insurance companies allow a maximum of 25 times your income. So you need a high-income stream and a lot of assets to afford that kind of expected payout. And you’ll have to back up your financial status with additional paperwork such as pay stubs and tax returns.

These higher coverage amounts come with permanent policies because they offer more fiduciary benefits to both you and your insurance company for a longer amount of time. Term life insurance policies have an expiration date of 30 years.

If after reading this you want to see where you fall on the maximum/minimum measurement scale, have a look at your income, standard of living debt, and current income. Then get on the computer to get an online insurance quote armed with the information you need to get the best life insurance for you and your family.

Universal Life Insurance: The Most Flexible Life Insurance Option

Maybe you’ve never heard of Universal Life Insurance. Many people haven’t. For those who don’t want the restrictions that Whole Life policies demand but desire the benefits it’s known for, a Universal Life Insurance policy offers the flexibility and freedom other policies do not.

Understanding Universal Life Insurance

Like Whole Life, Universal Life provides lifetime coverage and cash value.

A Universal policy puts you in the driver’s seat as to how much and when you pay your premiums after your first payment. (Most companies do have a minimum requirement.)

It allows you to adjust your death benefit according to your shifting circumstances. For example, if your beneficiaries are less dependent on you for financial security, you can lower the death benefit—and thus your premium amount.

And like Whole Life insurance, Universal Life allows you to build cash value, which you can invest anywhere you wish. You can invest it in a wealth-building vehicle or use it to pay for your premiums, loosening your budget to spend your hard-earned money on other things.


A Universal Life Insurance policy is vulnerable to market fluctuations. If interest rates don’t perform well, neither will your cash value. It could dwindle to zero or fall below your policy’s value. And if that happens, the insurance company will use your death benefit to pay the difference.

And if you miss a payment, which often happens as premium payment flexibility can lull you into a false sense of security, you will lose the policy and pay back any amount owed. Insurance companies depend on your premium payment to cover their costs of doing business. If those costs are higher than what you’ve paid in premiums or have in cash value, you’ll owe it back to your carrier.

But there is a way to protect yourself from this scenario.

No-Lapse Guaranteed Life Insurance Rider

You can purchase a no-lapse guaranteed rider on top of your Universal policy to protect it against unfortunate market dips and forgotten payments. This entails adding a minimum-amount premium with a set schedule onto the traditional Universal policy but it’ll keep you paid up even if you miss an unscheduled premium.

A No Lapse Guaranteed Universal Life Insurance Policy ensures your policy won’t lapse.

Riskier Universal Life Insurance Policies

Those with a higher tolerance for market fluctuations may consider Indexed Universal Life or Variable Universal Life, both of which build cash value quicker. They do need babysitting though as they are vulnerable to changes in the market and lapse-causing forgotten premium payments.

Universal Life Insurance: Pros and Cons

Armed with the basic facts, let’s examine the pros and cons Universal Life Insurance pose to someone considering buying Universal Life Insurance as opposed to Term Life or Whole Life.


• has the same benefits as Whole Life Insurance: lifetime coverage and cash value

• is less expensive than Whole Life

• offers more flexibility in how much and when you pay your premium

• gives you more control over where you’ll invest the cash value your policy provides


• is less expensive than Whole Life, but more expensive than other types of life insurance—especially if you opt for a No Lapse Guaranteed rider

• needs babysitting. If you aren’t monitoring your premium payments and investments, you could lose your coverage and owe the insurance company money.

As I said at the beginning of the article, while it’s called “universal,” Universal Life Insurance isn’t for everyone. But if you want the benefits but can’t afford Whole Life and have a risk-taker mindset, this type of policy warrants some consideration.

Why Do Life Insurance Companies Do Phone Interviews?

When you applied for your life insurance policy online, what you received was a quote. To obtain the actual policy, life insurance companies require a phone interview. And depending on how much life insurance you’re seeking, that may be all that’s required.

If you have spoken with one of PolicyWand’s noncommissioned agents, you know that they’re only there to answer questions pressure-free. Conversely, the person conducting your post-application interview is simply there to ask questions. Sometimes it’s the agent asking the questions. Other times it’s a third-party company representative.

Whoever is asking the questions, the main purpose of the life insurance phone interview is to verify that the information you provided on your application is true. It also ensures you buy only what you need and avoid buying what you don’t. The insurance company seeks to give you the best coverage and the fairest price.

What You Can Expect During a Life Insurance Interview

The interview takes no more than 30 minutes and at the end, you and the carrier will schedule a paramedical exam if one is required.

As long as you answer the questions accurately, the interview is easy. You’ll answer questions about your health, your job, your hobbies, and your finances.

Tips to Prepare for Your Life Insurance Phone Interview

Gather your documents ahead of time. Review the categorized lists below and make sure you either have the items on hand to refer to or can accurately answer questions about them.

Also, answer the questions as simply as possible. This keeps things running smoothly and saves you from answering more questions than you want to.


The insurance company will ask to verify your identity. So have the following items handy:

  • your driver’s license
  • your social security number
  • your citizenship documentation, if applicable

WHY? The carrier needs to make sure it’s you and not someone else buying the policy. If the person buying the insurance is not the person to be insured, the carrier will interview both people to establish what’s called insurable interest.


If you’ve applied for life insurance before, have that paperwork ready. Or at least be able to answer questions about previous applications.

Why? The insurance carrier is required to verify that the information that you provided on this application matches information from previous ones. If there are discrepancies, the carrier wants to clarify them so you don’t get turned down for misrepresentations during the underwriting process.


Be prepared to provide information about:

  • any diagnoses you’ve had in the past 10 years
  • any surgeries you’ve had in the past 10 years
  • your prescriptions
  • your current physicians and their names, addresses, and phone numbers
  • family health history, including:
    • diagnoses of major illnesses such as cancer, diabetes, or heart disease
    • the dates and causes of immediate family members’ death, if applicable
    • relatives you’ll be asked about include parents, siblings, and grandparents
  • your current weight and any weight fluctuations you’ve experienced, plus or minus 10 pounds, in the past year

Why? They need to assess your health status to assess your risk. The healthier you are, the less you will pay in premiums. The less healthy you are, the higher your premium. Your conversation is protected under HIPAA laws.


Smoking, drinking and drug use will raise your rate. Exercise and good habits lower it. Be prepared to answer questions about:

  • how often you exercise, including team sports
  • If you’ve quit drinking, smoking or using recreational drugs, make sure you share how many years it’s been since you quit. That may lower your premium rate.


Not only do habits affect your insurance rate but hobbies can, too. Be ready to answer questions about any extreme sports you engage in such as car racing, rock climbing and the like.

Why? Your habits and hobbies also affect your risk. The riskier they are, the more you’ll pay in premiums.


Finances also factor into the risk assessment equation. Be prepared to answer questions about:

  • the job you currently have
  • the salary you currently earn
  • your assets
  • an estimate of your net worth
  • how much debt you have

Why? The insurance company needs assurance that you can afford to pay the premiums for the foreseeable future. A steady job and strong assets make you a better candidate.

Although some carriers forgo the paramedical exam for policies with lower death benefit payouts, there’s no getting around the phone interview. It’s not only in the company’s best interest but yours as well. Preventing fraud allows insurance companies to provide you and their other clients with the best coverage at the fairest price.

That’s in everyone’s interest.