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Best life insurance for homeowners
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Owning a home is one of life’s biggest milestones — and one of its biggest financial commitments. Whether you’re sharing that responsibility with a partner or you're the primary provider, it’s worth asking: what would happen to your home if something happened to you?
That’s where life insurance can offer peace of mind. In this guide, we’ll break down why homeowners might want to consider coverage, how different policy types work and which companies offer the best options if you're looking to protect the roof over your head. With decades of experience navigating the insurance space, Bankrate is here to help you make confident, informed decisions — and keep your home and loved ones protected for the long haul.
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Whole life insurance combines life insurance with an investment component.
- Coverage for life
- Tax-deferred savings benefit if premiums are paid
- 3 variations of permanent insurance: whole life, universal life and variable life include investment component
Term life insurance is precisely what the name implies: an insurance policy that is good for a specific term of time.
- Fixed premium over term
- No savings benefits
- Outliving policy or policy cancellation results in no money back
Powered by HomeInsurance.com (NPN: 8781838)
This advertising widget is powered by HomeInsurance.com, a licensed insurance producer (NPN: 8781838) and a corporate affiliate of Bankrate. HomeInsurance.com LLC services are only available in states where it is licensed and insurance coverage through HomeInsurance.com may not be available in all states. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
Do homeowners need life insurance?
Homeownership can be both a dream and a responsibility. For many, it’s not just one of the biggest purchases they’ll ever make — it’s also their biggest financial liability. If something were to happen to you, would your family be able to keep up with the mortgage on their own?
Life insurance can offer the kind of protection that helps your loved ones stay in the home you’ve worked hard to provide. Losing a provider’s income can quickly turn an already painful situation into a financial crisis. The right policy helps ensure that, even in your absence, your family has the means to cover major expenses — starting with the one tied to the place they live.
Types of life insurance for homeowners
Before diving into policy types, here’s a quick breakdown: Life insurance is a contract between you (the policyholder) and an insurance company. You pay premiums, and in return, your chosen beneficiaries receive a payout — called the death benefit — if you pass away while the policy is active.
There are two main categories of life insurance to consider as a homeowner:
- Provides coverage for a set period (usually 10, 20 or 30 years)
- Often the most affordable option
- Designed purely for protection — doesn’t build cash value
- Matches well with a mortgage timeline or other debts that eventually go away
- Great for: Covering your mortgage or other major expenses during your earning years.
- Stays inforce for your entire life (up to a coverage age range of 95 to 121 years), as long as you pay the premiums
- Typically builds cash value you can borrow against or use later in life
- Higher cost, but can support long-term financial planning goals
- Great for: Estate planning, special needs dependents or supplementing retirement.
One thing to remember is that you don’t have to choose just one. Many homeowners layer coverage — using a term policy to protect their home and a smaller permanent policy for lifelong peace of mind.
The difference between life insurance and mortgage life insurance
If your main concern is protecting your home, you might be wondering whether a mortgage life insurance policy could do the job just as well as a traditional life insurance policy. While the names sound similar, the coverage works quite differently — and it’s important to understand those differences before you choose.
Here’s how they compare:
Traditional life insurance
- Payout goes to your chosen beneficiary, not the lender
- Offers flexibility — the money can cover the mortgage or other living expenses
- Death benefit typically stays level regardless of how much you owe on your home
- Can be term or permanent
- Depending on the policy, it may require more detailed underwriting, including a health review and exam
Mortgage life insurance
- Pays directly to your mortgage lender if you pass away
- Has declining coverage — the payout shrinks as your mortgage balance decreases — though premiums remain level
- Typically limited to your mortgage debt only
- Often available with minimal health screening, which can be a benefit if you have health issues that make it harder for you to secure a private policy
Mortgage life insurance can offer some peace of mind, especially if you’ve had trouble qualifying for traditional coverage. But for most homeowners, a traditional life insurance policy can provide more long-term flexibility and better overall value.
Best life insurance companies for homeowners
Finding the right life insurance policy as a homeowner isn’t just about price — it’s about choosing a provider that aligns with your financial goals and offers reliable protection for your biggest asset. Whether you're looking to cover a 30-year mortgage, bundle policies for extra savings or work with a company known for strong customer service, the companies below stand out for homeowners.
Bankrate evaluated top life insurance providers based on factors like coverage options, financial strength, customer satisfaction (as measured by the latest J.D. Power studies) and digital tools that make managing your policy easier. While these companies offer strong choices, the best fit for you will ultimately depend on your personal needs, budget and long-term plans.
| Company | BR Score | J.D. Power Score | AM Best financial strength rating |
|---|---|---|---|
| State Farm | 4.9 | 699/1,000 | A++ |
| USAA | 4.4 | Not rated | A++ |
| MassMutual | 4.4 | 673/1,000 | A++ |
| Pacific Life | 4.4 | 657/1,000 | A+ |
| Lincoln Financial Group | 4.3 | 652/1,000 | A |
State Farm stands out for homeowners looking for a flexible, trustworthy life insurance provider — especially if term coverage is the priority. Named the Best Term Life Insurer in the 2025 Bankrate Awards, State Farm earns top marks for customer satisfaction and financial strength. It also ranked first in the 2024 J.D. Power U.S. Individual Life Insurance Study.
Three distinct term policy options — including Instant Answer Term, which doesn’t require a medical exam — give shoppers a range of choices for short- and long-term needs. Features like conversion options, return-of-premium choices and riders for children or disability add even more value. And if you’re bundling with home or auto insurance, State Farm has you covered there too, making it a strong pick for homeowners looking to simplify their coverage.
If you’re a member of the military community, USAA could be a strong choice for life insurance — especially if you’re also insuring your home or car. The company offers term, whole and universal life policies, plus access to home and auto coverage for eligible members. It’s also a four-time Best Home Insurance Company Overall winner in the Bankrate Awards, with standout customer satisfaction and competitive rates.
USAA’s life insurance is available to the general public, but its home and auto policies are exclusive to the military community. For homeowners who qualify, bundling multiple lines with USAA could mean more savings and easier account management.
MassMutual has long been a standout in the world of whole life insurance — and for good reason. The company took home the 2025 Bankrate Award for Best Whole Life Insurer, thanks to its strong financial ratings, excellent customer satisfaction scores and impressive dividend history. In fact, MassMutual has paid dividends to eligible policyholders every year since 1869 — a rare consistency in this industry.
With an A++ financial strength rating from AM Best and a broad lineup of policy types and rider options, MassMutual offers flexibility for homeowners looking to build long-term protection. And while it doesn’t bundle home or auto insurance like some other carriers on this list, its commitment to stability and value could still make it a solid option for those focused on legacy planning or cash value growth.
Pacific Life earned the 2025 Bankrate Award for Best Universal Life Insurer thanks to its wide range of flexible policies and strong customer satisfaction. Whether you're looking for a no-lapse guaranteed universal policy or want to tap into market performance with indexed or variable options, Pacific Life delivers customizable options. The company also scores well above average in the 2024 J.D. Power U.S. Individual Life Insurance Study and holds an A+ (Superior) AM Best rating for financial strength.
If you're someone who prefers tailoring your coverage — from death benefits to premium flexibility — Pacific Life could be worth considering. While it doesn’t offer auto or homeowners insurance for bundling, its life insurance offerings could still make it a strong pick for homeowners looking to lock in long-term coverage with room to grow.
If you’re a homeowner looking for fast, hassle-free life insurance, Lincoln Financial Group might be a good fit. The company ties for Best No-Exam Life Insurer in our 2025 Bankrate Awards thanks to its TermAccel product, which offers up to $2.5 million in term coverage without requiring a medical exam for qualified applicants. Coverage can be issued in as little as two business days, making it an attractive option for those who want financial protection in place quickly.
Lincoln also stands out for its flexible conversion terms, allowing you to shift your term policy into permanent coverage up to age 70. While it doesn’t offer home or auto insurance — so bundling isn’t an option — it makes up for it with strong financial stability, an A+ AM Best rating and a wide selection of rider options. Homeowners who value speed, simplicity and long-term flexibility may find Lincoln’s no-exam policies appealing.
Buying life insurance as a homeowner
Life insurance isn’t a requirement for buying a home, but it could be a smart companion to such a major financial move. Your mortgage represents one of the largest long-term obligations you’re likely to take on — and if something unexpected happens to you, life insurance could help your loved ones stay in the home without scrambling to cover the costs.
That said, life insurance isn’t something you can typically lock in overnight. Depending on the type of policy and underwriting involved, the process can take anywhere from a few days to a few weeks. If you’re hoping to coordinate your coverage with your home purchase, or just want protection in place sooner rather than later, starting early can help things go a lot more smoothly.
What to expect when buying life insurance
- Get quotes: Shop around to compare costs, coverage options and customer service ratings.
- Apply: You’ll fill out a short application and answer health and lifestyle questions.
- Underwriting: For no-exam policies, this can be quick. For traditional coverage, expect a medical exam and a longer review period.
- Approval and payment: Once approved, you’ll review your offer, pay your first premium and your policy goes live.
How much life insurance coverage do I need?
The right amount of life insurance depends on your goals — and whether you’re buying term or permanent coverage.
If your main focus is covering your mortgage and providing a financial safety net for your loved ones, term life is usually a good fit.
Calculating life insurance needs
The goal for many is to have enough life insurance to replace your income. A common method to find how much coverage you need is to perform a reverse calculation. Divide the income stream by a conservative rate of return — as if you were to invest the entire proceeds and leave the principal intact.
Example:
The annual income you provide to your family equals $80,000 and a reasonable rate of return is 5 percent.
80,000/0.05 = 1,600,000
Life insurance death benefit needed = $1,600,000
With permanent life insurance, your coverage is designed to last your entire life and may include a cash value component. This type of policy is typically better for long-term goals like estate planning, business succession or caring for someone with lifelong needs — and the coverage amount you choose should reflect those added layers of protection.
How long do I need life insurance coverage for?
If you're opting for term life insurance, the length of your policy should match the timeline of your biggest financial responsibilities. For homeowners, that often means aligning your term with the length of your mortgage — 15, 20 or 30 years are common choices. Once the mortgage is paid off, your need for life insurance may be lower.
Permanent life insurance, on the other hand, typically lasts your entire life as long as you keep up with your premiums. This makes it a strong option if you're looking to leave a legacy, support a dependent with special needs, or lock in lifelong protection without needing to reapply later.
Another strategy: Laddering policies to meet life insurance needs
Laddering means buying multiple life insurance policies with different term lengths to match specific financial goals.
For example, let’s say you only have 10 years left on your mortgage but your children are still very young. Instead of buying a large 30-year term policy to cover both the home and costs of raising children, you could buy two separate policies. A 10-year $250,000 term policy and a 30-year $500,000 policy.
This strategy can offer targeted protection — and may be more cost-effective than one large policy.
Is life insurance worth it?
The income required to afford a median-priced home nationwide has increased by 50 percent in the last five years, according to Bankrate’s 2025 Home Affordability Survey. Furthermore, the cost of owning and maintaining a home can cost over $18,000 annually, according to Bankrate's 2024 Hidden Costs of Homeownership Study.
These numbers beg the question: Could your loved ones afford to keep their home if you passed away unexpectedly? If the answer is no or even if you're unsure, a life insurance policy can help provide financial reassurance and peace of mind.
When you zoom in on real stories — the ones that unfold after someone passes away — it becomes clearer just how deeply life insurance, or the lack of it, can shape what happens next.
One Reddit user shared a raw and painful memory:
My dad passed away a couple months ago from cancer… There was a $30k life insurance policy taken out on him… All of that money went to the funeral alone. My step-mom now has a mortgage and a car to pay for and tons of medical debt… She thinks that she will have to sell the house.
The financial stress didn’t end with the funeral. It lingered — in the form of bills, uncertainty and the possibility of losing the place that held a lifetime of memories. That’s the emotional weight people rarely talk about when debating whether life insurance is worth it.
But not every story ends that way.
Another user described the comfort that life insurance brought during his own health crisis:
I got $1,000,000 of term life insurance shortly before my daughter was born. I was diagnosed with cancer 2 years later… knowing that she would be taken care of if I died helped me process things.
It’s not about numbers. It’s about knowing your family could have a soft place to land — the house doesn’t have to go, the bills can be handled and the people you love most have room to breathe while they grieve.
As one commenter put it:
Dying is a bill. And saddling that bill on your mourning family is often what happens to those without life insurance.
Life insurance won’t erase the pain of loss. But in the right situation, it can help keep that pain from spiraling into something even harder: financial instability, displacement or impossible decisions made at the worst possible time.
Whether it’s "worth it” or not? That depends on your life, your people and what it would mean to leave them with just a little more peace — and a little less to carry.
Frequently asked questions
