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Supplemental life insurance is typically an additional policy that you can purchase to augment the group life insurance policy obtained via your employer.

These policies can provide extra peace of mind when it comes to protecting your loved ones, but is more insurance always better? You may wonder whether purchasing this kind of policy is a good idea or not worth the added expense. Let’s take a closer look to see whether supplemental life insurance makes sense for your situation.

Understanding Supplemental Life Insurance

Supplemental life insurance is a policy taken out in addition to basic coverage, which might be term or permanent life insurance. You can often purchase a supplemental policy through an employer to augment what they offer as an employee benefit. However, these policies don’t have to be secured through your job. We’ll learn more about that in a minute.

Some of these policies come with a death benefit, a lump sum payment that goes to the beneficiaries you’ve named (the loved ones who will inherit the money). Others may be a different kind of policy; say, one that pays funds that are earmarked to pay for funeral expenses. Depending on the details of your life, these add-ons may be an inexpensive way to boost your protection and sense of security.


💡 Quick Tip: With life insurance, one size does not fit all. Policies can and should be tailored to fit your specific needs.

Do You Need Supplemental Life Insurance?

Deciding whether or not to buy a supplemental policy is a very personal decision. To help figure out the right answer for your situation, it may help to ask yourself and answer a few questions. Let’s consider some of those here.

Does Your Employer Provide Life Insurance?

Because supplemental insurance is meant to enhance the life insurance policies you already have, check to see if your employer offers basic life insurance as a benefit. If so, how much? Many times, employers offering this insurance will provide a multiple of the employee’s current salary. Other times, it’s significantly less — $10,000 to $25,000 worth of coverage is common. Those are figures that many people will find too low to provide the kind of protection they’d like.

If you feel you don’t have enough protection, you may want to look for ways to boost your coverage so that in a worst-case scenario, you know your loved ones will have enough money to cover their expenses. Perhaps your employer offers supplemental policies that will get you to the level of life insurance coverage that you desire. Otherwise, you can also look on the open market for primary or supplemental policies.

Have Your Compared Life Insurance Rates?

If you haven’t compared prices of life insurance rates in a while (or ever), you might want to give it a try. Just because an employer offers life insurance, including supplemental coverage, you may not want to buy it. You may discover that you can get enough life insurance through a standard policy without adding a supplemental one.

You can quickly get quotes by calling an insurance agent or, to save even more time, from a website that provides them from multiple companies. When looking at the quote that gives you the best coverage for the most affordable premiums, would you still need a supplemental policy? The answer may be no. There’s a good deal of competition in the marketplace and great deals to be found.

Recommended: How to Buy Life Insurance in 9 Steps

How Is Your Health?

First, let’s understand that your health rating is a key factor in buying life insurance on the open market. Rates tend to be lower when you are healthier and younger. Health is typically assessed by the insurer asking you questions about your medical status and possibly having you submit to a brief health exam that involves the collection of blood and urine samples.

While plenty of life insurance policies require health exams and/or medical records, many insurers also offer lab-free options that don’t require medical exams (although you’ll almost certainly need to answer health-related questions). These are often the kind employers offer employees. Typically, these policies are for people who fit into certain age groups and other categories in which they’re likely to be healthy. These lab-free policies are often available for up to $1 million.

Now that you know how this works, understand the implications of your health status. If you have an underlying health condition, are a smoker, or have other qualifying factors, you would probably pay more for life insurance if you went shopping on the open market. In these cases, buying a supplemental policy through your job could be a good way to get coverage at a relatively low cost.

Do You Need Portable Coverage?

Before you sign up for a supplemental policy, consider whether it’s portable. “Portability” is your ability to keep certain benefits if you switch your place of employment or leave the workforce entirely — in this case, your life insurance. If you’re thinking about changing jobs or have reason to believe that you may not work at your current employer for much longer, it’s important to know if your life insurance is portable.

How Much Supplemental Life Insurance Should You Buy?

A common recommendation is to carry 10 to 15 times your annual income in life insurance coverage. Your goal is to choose a policy that would replace the income you would have brought in if you weren’t around to provide for your family. So, if you multiply your salary by those numbers and then subtract what you have in your “regular” life insurance policy, that can be a starting point to determine how much supplemental insurance makes sense.

If you make $50,000 a year and multiply by 10 or 12, that’s $500,000 to $600,000 in coverage you want to purchase. (You might want to bump it up a bit to account for inflation.) So, if you have a term life insurance policy for $500,000, you might decide to get a supplemental policy for $200,000.

Now, factor in your outstanding debt. Life insurance payouts can be used to pay them off, including mortgage loans, car loans, student loans, credit cards, and so forth. So, if you have these debts, you can add their outstanding balances up and consider adding those amounts to your life insurance needs. If, for example, these debts total $300,000, you might bump up the supplement policy example above to $500,000.

Recommended: Life Insurance Definitions

Types of Supplemental Life Insurance

We’ve been focusing on one kind of supplemental insurance, a popular option that lets you increase the overall life insurance coverage you own. This kind of policy would pay a lump-sum death benefit to your beneficiaries. If you purchase this, it’s an employee benefit that can increase the amount of coverage that you own (although you may be responsible for part of all of those premiums albeit at a group rate).

But let’s consider some other possibilities that may be offered:

•   Supplemental spouse life insurance. This kind of insurance provides a death benefit if the employee’s spouse dies and may also be called supplemental family life insurance. Employees may also have the option to buy supplemental child life insurance to cover the death of a child or other dependent who qualifies.

•   Accidental death and dismemberment. This provides coverage to your beneficiaries if you are killed or lose physical function in a type of accident that’s covered in the policy. Depending on the kind of work you do or the pastimes you pursue, this may or may not suit your needs. With AD&D insurance, you could receive a benefit, say, if you were to lose your eyesight, your hearing, or limb in an accident. But it won’t provide any benefit if you die due to other medical conditions, which are more likely to occur.

•   Final expenses. These policies pay a small benefit (typically between $5,000 and $35,000) to cover end-of-life expenses, such as funeral and burial costs. Some people like to have this kind of coverage, which means your loved ones wouldn’t have to pay out of pocket for these charges.

How Much Coverage Can You Get Through Work?

It’s worthwhile to evaluate what life insurance options are available through your work. Employers may offer lower rates since they get a group insurance rate. Also, it’s also possible that your employer would pay part of your premiums. It’s typically easier to get insured through a group plan. While you may need to answer medical questions, it’s less likely that you’ll need a medical exam for group insurance.

Group plans through your employer, though, are usually not portable. This means that if you leave that employer, the coverage ends and then you’ll need to shop around again — now at an older (although not necessarily old) age and perhaps with new health conditions. Plus, these plans aren’t as customizable as you might get on your own.

How Much Does Supplemental Life Insurance Cost?

If your employer offers this benefit as part of a group policy, the cost may be minimal, especially if the workplace subsidizes the premiums.

Otherwise, it can make sense to get personalized quotes, given that age, gender, health conditions, amount of the policy, term, and more can impact the price. There are online calculators that can help you do the math and see how the numbers add up.


💡 Quick Tip: Term life insurance coverage can range from $100K to $8 million. As your life changes, you can increase or decrease your coverage.

The Takeaway

To recap: What is supplemental life insurance? It’s a policy that enhances a person’s primary life insurance policy. It helps to ensure that they have enough financial benefit to protect their loved ones if they weren’t there to provide for them.

While supplemental policies through your employer can be affordable, they may not deliver the level of coverage you need. Take a close look at your options, and take advantage of the simple online tools that can help you find the kind of policy you need at the right price.

SoFi has partnered with Ladder to offer competitive term life insurance policies that are quick to set up and easy to understand. Apply in just minutes and get an instant decision. As your circumstances change, you can update or cancel your policy with no fees and no hassles.

Photo credit: iStock/Kemal Yildirim

Coverage and pricing is subject to eligibility and underwriting criteria.
Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers- for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products.
Ladder, SoFi and SoFi Agency are separate, independent entities and are not responsible for the financial condition, business, or legal obligations of the other, SoFi Technologies, Inc. (SoFi) and SoFi Insurance Agency, LLC (SoFi Agency) do not issue, underwrite insurance or pay claims under LadderlifeTM policies. SoFi is compensated by Ladder for each issued term life policy.
Ladder offers coverage to people who are between the ages of 20 and 60 as of their nearest birthday. Your current age plus the term length cannot exceed 70 years.
All services from Ladder Insurance Services, LLC are their own. Once you reach Ladder, SoFi is not involved and has no control over the products or services involved. The Ladder service is limited to documents and does not provide legal advice. Individual circumstances are unique and using documents provided is not a substitute for obtaining legal advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Uninsured motorist coverage shields you from having to pay for injuries and property damage in accidents that weren’t your fault and were caused by an uninsured driver.

According to the Insurance Research Council, 14.0% of motorists on the road are uninsured. Purchasing uninsured motorist coverage reduces the likelihood that you’ll have to pay out of pocket if you’re involved in an accident caused by one of these irresponsible drivers.

It’s generally a good idea to add uninsured motorist coverage to your auto insurance policy, as it’s fairly inexpensive, usually only costing an extra $5 – $10 a month, per vehicle, for policyholders with clean driving histories. Below, we give you the scoop on the different kinds of uninsured motorist coverage and what these policies entail.

Breaking Down Uninsured Motorist Coverage Variations

There are two main kinds of uninsured motorist coverage. Similar to your standard auto insurance policy’s collision and bodily injury coverage, this kind of policy breaks down into uninsured motorist bodily injury coverage and uninsured motorist property damage coverage.

•   Uninsured motorist bodily injury coverage: Covers your party’s medical expenses and related costs in accidents caused by uninsured drivers.

•   Uninsured motorist property damage coverage: Covers your repair bills and related costs in accidents caused by uninsured drivers.

Bodily injury and property damage coverage for uninsured motorists are sometimes packaged and sold together when you purchase uninsured motorist insurance. However, this isn’t the case with all policies; check with your insurance provider to know for sure. Now, let’s take a closer look at each of these kinds of coverage.

Uninsured Motorist Bodily Injury Coverage (UMBI)

Uninsured motorist bodily injury coverage (UMBI) pays for the cost of medical bills, lost wages, pain and suffering, and funeral costs (though we hope that is never needed) in the event an uninsured driver causes an accident in which you’re the victim.

In some instances, this policy may pay out if you, as a pedestrian or bicyclist, are involved in an accident caused by an uninsured driver. Check with your insurance provider to confirm whether this might be covered.

UMBI typically does not have a deductible to meet; you would get full reimbursement of the costs.

Uninsured Motorist Property Damage Coverage (UMPD)

Uninsured motorist property damage coverage (UMPD) pays for the cost of repair bills for either your vehicle or property in the event either is involved in an accident caused by an uninsured driver.

Unlike bodily injury coverage, UMPD often requires the payment of a deductible when used. This is usually set by state law and typically is between $100 and $1,000.


💡 Quick Tip: If your car is paid off and worth only a few thousand dollars, consider updating your car insurance: You might choose to opt out of collision coverage and double down on liability.

Uninsured vs Underinsured Motorist Coverage

Here’s another kind of coverage you should know about: underinsured motorist coverage, which helps cover your costs if you’re involved in an accident where the party at fault has insufficient insurance coverage to pay for your medical costs.

Underinsured motorist coverage differs from uninsured motorist coverage in that it’s designed to cover any shortfalls in your costs due to the underinsured motorist’s inadequate insurance policy. By contrast, uninsured motorist coverage covers your bills due to the uninsured driver’s failure to purchase insurance.

Similar to uninsured motorist coverage, underinsured motorist coverage also comes in bodily injury and property damage variants. Both bodily injury and property damage coverage is usually packaged and sold together, though insurance policies may vary.

Underinsured motorist coverage is sold separately from uninsured motorist coverage, and states can have different coverage requirements for each. Check with your insurance provider to verify whether you need to purchase these separately.

Uninsured Motorist Coverage Limits

Your auto insurance quote will typically break down your uninsured motorist coverage limits into two numbers: a smaller dollar figure followed by a larger dollar figure, separated by a slash. For example, $100,000/$300,000.

This can also be expressed as follows:

•   $100,000 per person

•   $300,000 per accident

These two numbers represent the per person and per accident coverage limits of your uninsured motorist insurance. The per person limit is the maximum your insurance company will pay for any single individual injured in a covered accident. Conversely, the per accident limit is the maximum your insurance company will pay for a covered accident, regardless of how many injured people are in your party.

How Uninsured Motorist Coverage Limits Work

If you’re thinking, “But what exactly does that mean?” we hear you. Let’s spell out how this coverage would work. If you have a family of five that’s riding in a car and it gets hit by an uninsured driver, the maximum amount your insurance company will pay for their cumulative medical bills is $300,000, despite each individual’s coverage limit being $100,000.

If you’re ever involved in an accident caused by an uninsured driver where your costs exceed your coverage limits, in most cases, your health insurance policy will usually kick in to cover the balance. Consult your insurance providers for the specifics on your policies.

Recommended: How Much Auto Insurance Do I Really Need?

How Much Uninsured Motorist Coverage Do I Need?

The answer depends on whether your state requires uninsured motorist coverage. If it does, you must buy at least the state’s minimum (for more details, see below). Typically, this amount will match your liability coverage amounts. If your state does not require this kind of coverage, consider variables like the healthcare costs in your state and how much your vehicle is worth. Generally, uninsured motorist coverage is fairly affordable and is a worthy investment for some peace of mind.

According to the Insurance Research Council, approximately one in seven drivers on the road are uninsured. This figure is even higher in states like Mississippi and Michigan, where over 25% of drivers on the road are estimated to be uninsured.

Based on those figures, residents of higher risk states may be well-served by purchasing uninsured motorist coverage, while it might not be as high of a priority for residents of lower-risk states, like Massachusetts or New Jersey, where 3.5% and 3.1% of drivers respectively are estimated to be uninsured.

Now, let’s circle back to the states that do require this kind of policy. The table below lists the regulations regarding the minimum required uninsured and underinsured motorist coverage for each state.

Recommended: What Does Liability Auto Insurance Typically Cover?

Uninsured/Underinsured Motorist Coverage Requirements by State

Let’s take a look at the guidelines in every state, so you can see how much coverage may be required where you live. In each category, the amount shown is per person/per accident. When there is not a figure in an area of the chart, that means the insurance isn’t required.

^*New Hampshire and Virginia do not require drivers to purchase auto insurance, but drivers who do choose to purchase auto insurance must have at least the minimum uninsured/underinsured motorist coverage amounts listed.

Recommended: 5 Steps to Switching Your Car Insurance

How Much Does Uninsured Motorist Coverage Cost?

Depending on how much uninsured motorist coverage you choose to purchase and your personal driving habits, your costs could be as little as $5 to $10 per month. This figure also tends to vary widely based on the overall percentage of uninsured motorists in your area, according to national insurance data.

Insurance premiums vary widely across drivers, states, and even insurance providers, so make sure you check around for a personalized quote.


💡 Quick Tip: Saving money on your fixed costs isn’t always easy. One exception is auto insurance. Shopping around for a better deal really can pay off.

The Takeaway

The prospect of being in an accident caused by an uninsured driver is a real concern, given the number of these motorists on the road. Adding uninsured motorist coverage to your auto insurance policy may be a good idea. In some states, it may even be required by law. For a relatively low cost, you can protect yourself from the possibility of being left with bills because another driver didn’t have enough insurance. The right package of car insurance policies is one way to protect yourself from unexpected circumstances.

When you’re ready to shop for auto insurance, SoFi can help. Our online auto insurance comparison tool lets you see quotes from a network of top insurance providers within minutes, saving you time and hassle.

SoFi brings you real rates, with no bait and switch.

Photo credit: iStock/RyanJLane

Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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The Insurance Information Institute cites that the average cost of renters insurance across the United States is about $173 per year, according to their most recent data. That said, renters insurance premiums can vary widely based on where you live, your claims history, and your chosen coverage limits, among other factors.

Let’s take a look at renters insurance and what factors go into its cost.

What Is Renters Insurance?

Renters insurance policies offer similar coverage to homeowners insurance. The goal is to reimburse you for any losses that you suffer in an emergency. Imagine if you were renting a house and a leak flooded your clothing closet, destroying your entire wardrobe. Or if a burglar broke in while you were out and made off with your laptop and other electronics. These losses would be one level of pain. Not having insurance that could help you afford replacements would only add a whole other level to that!

It’s generally a good idea to purchase a renters insurance policy if you’re renting a home, regardless of whether it’s an apartment or a house. This holds true even if you are renting an apartment in a private home rather than an apartment complex. Your landlord may have homeowners insurance that is designed to reimburse them in the event of say, damage or a robbery. This however generally does not cover your assets in the event of a loss.


💡 Quick Tip: Online renters insurance can cover your belongings not just at home but also in your car and on vacation.

Average Cost of Renters Insurance by State

We’ve included the average annual renters insurance premiums for each state in the table below. This data is based on the latest figures from the Insurance Information Institute, a nonprofit organization that collects and shares data related to the insurance industry.

Top 5 Most Expensive States for Renters Insurance

According to data from the Insurance Information Institute, the most expensive state for renters insurance in the nation is Mississippi. Renters in the Magnolia State pay an average of $256 per year for renter’s insurance. Let’s look at the top five:

Mississippi and Louisiana are expensive states in terms of renters insurance because of their proximity to the coast. Being right on the Gulf Coast means residents are often vulnerable since hurricanes may first make landfall in these areas. The risk of loss is higher than inland.

Oklahoma, Texas, and Louisiana all lie in the infamous “Tornado Alley,” which is a strip of states, bordered by the Dakotas to the north and Texas to the south, that is historically prone to fiercely damaging tornadoes. Combined, these factors have resulted in higher renters insurance premiums due to each location’s heightened susceptibility to wind and storm damage.

Top 5 Least Expensive States for Renters Insurance

North Dakota is the least expensive state for renters insurance in the United States, according to data gathered by the Insurance Information Institute. North Dakotans pay an average of $116 per year for renters insurance coverage.

In general, renters policies are lower in areas that aren’t subject to extreme weather (like hurricanes and tornadoes) and that have low crime rates.

What Factors Determine Cost of Renters Insurance?

The cost of your renters insurance may be influenced by a multitude of factors, the most prominent being the following:

•   Coverage limits

•   Deductible

•   Claims history

•   Location

•   Pets

•   Added coverage

Understanding these variables can go a long way towards reducing your costs and helping you choose the renters insurance policy that best suits your needs.

Coverage Limits

This is one of the key factors impacting the costs that you can control. Most insurance companies will give you a choice between higher and lower limits on your renter’s insurance policy.

Coverage limits are the maximum amounts an insurer is willing to pay in the event of a covered claim. There are different kinds of coverage (more on that below), and the limits offered usually range from as low as $10,000 in personal property coverage (the items in your home that could be damaged or lost) to as high as $500,000 in liability coverage (this be tapped if someone got injured at your house).

Generally speaking, the more insurance coverage you need, the higher your costs.

Deductible

The deductible is the other major component of your renter’s insurance costs that you can influence. In the event you file a claim, the deductible is the amount you agree to first pay out of pocket before renters insurance will kick in.

Your renters insurance deductible transfers risk from the insurer to you, when it comes to losses incurred in a covered claim. Consequently, insurers are willing to charge you a lower premium if you opt for a higher deductible, as this reduces how much they need to pay out. As you might guess, if you want a low deductible, so you would pay as little out of pocket as possible, your rates will be higher.

Depending on your insurance provider, your optional deductible will usually range anywhere from $0 to $2,000. In some instances, insurance providers will allow you to pick your deductible as a percentage of your total insurance limit, for example, if your policy limit is $10,000 and your deductible allotment is 10%, your deductible will effectively be $1,000 for each claim filed.

Claims History

Similar to your FICO score, insurance companies use what’s called a “CLUE” report (Comprehensive Loss Underwriting Exchange) to track your history when it comes to filing insurance claims. This report contains information regarding all insurance claims filed within the past 5 to 7 years, regardless of whether you move or change insurer.

Repeated claims with hefty payouts can be a red flag for insurers and result in a hike to your insurance premiums. Beware that even claims filed under other types of insurance policies, like homeowners insurance, can impact your renters insurance premium.

Location

You know that saying about the three most important things in real estate are location, location, location? Well, in terms of renters insurance, location isn’t the only thing, but it’s a major variable in terms of how much you will pay. Are you renting a cabin in the woods, in a low-crime rural area? Or are you moving into an apartment in the middle of a major city, where robberies are common? Or are you perhaps planning on signing a lease for the sweetest beach shack, just steps from the shore? The location of your rental will impact how expensive your premium is.

Behind the scenes, insurance actuaries rely on complex formulas to price your premium; these take many factors into account, including the risk of natural disasters, crime, and fire, among other factors.

Depending on how risky the insurer perceives your area to be, expect to be charged a higher premium if you live in an area that’s especially prone to crime or natural disasters.

Pets

While we all love our pet pals, it’s fairly commonplace for pet owners to be charged higher premiums if they live with a furry friend. Regardless of how sweet your pet may be, insurers deem pets a liability risk, particularly when it comes to things like bites, scratches, and damage to personal property. Your renters policy will potentially pay out if your critter bites a guest or even nips someone while you are walking it in the lobby of your apartment building.

In some instances, insurers may be unwilling to insure certain types of pets; these are typically certain breeds of dogs or exotic animals deemed “higher risk.” Check with your insurer to verify whether or not your pet is covered under your renters insurance policy.

Added Coverage

Your policy will likely include standard coverage for personal property, liability, and loss of use (meaning expenses incurred if you can’t live in your usual dwelling) offered through your standard rental insurance policy. In addition, many insurers offer a suite of optional coverages, riders, and endorsements that you can tack onto your renter’s insurance policy to best suit your needs.

Naturally, added coverage comes with added cost. However, as renters insurance is fairly affordable, it usually adds only a few dollars a month.

Depending on your personal assets, it may be worthwhile to consider some of these optional coverages. Some of the most common add-ons/endorsements/riders offered through insurers are as follows:

•   Scheduled personal property: This ups the coverage limit for a specific named item or items that would fail to be fully covered under the policy limits of your standard renters insurance.

•   Replacement cost: Typically, an insurance policy will reimburse you for the actual cash value of an item. So if your 5-year-old laptop is stolen or destroyed, you’d be paid the current value of it. With replacement cost coverage, the depreciation is eliminated from the calculation of your property’s value, resulting in a higher payout in a covered claim.

•   At-home business: This covers damages to any business equipment you have at home that isn’t covered under a standard renters policy.

•   Pet damage: This sometimes allows you to add coverage for property damage and liability caused by pets that isn’t covered under your standard renters policy. Exclusions may apply for specific breeds or types of pets.

•   Earthquake coverage: This covers damage to your property caused by an earthquake, which isn’t typically covered under renter’s insurance.

•   Identity theft: This covers costs incurred if you’re ever the victim of identity theft, as well as fees for expert assistance when it comes to restoring your identity and resolving any fraudulent activity.

What’s Covered by Renters Insurance

The majority of renters insurance policies provide the following standard coverages:

•   Personal property: This covers any loss or damage to your possessions due to a covered event, such as fire or theft.

•   Liability: This covers any property damage or bodily injury costs that you’re found liable for in the event of a covered claim.

•   Loss of use: Also known as “additional living expenses”, this covers the costs of temporary housing in the event your rental is rendered unlivable due to a covered loss.

•   Medical payments to others: This covers the medical costs of guests that are injured on your property. Unlike liability insurance, this does not require you to be legally liable for any injuries.

Most insurance providers will allow you to adjust the limits on these coverages to suit your needs. Keep in mind, this will likely impact your renters insurance costs; more coverage will probably mean higher premiums.

Recommended: What Does Renters Insurance Cover?

Do You Need Renters Insurance?

Legally, you are not required to purchase renters insurance. However it’s advisable for most individuals to purchase renters insurance, as your landlord’s homeowners insurance policy will not cover any losses or damage to your personal property; nor will it typically cover any liability for bodily injury or property damage that occurs while the property is under lease.

Certain rental properties will require you to purchase and maintain an adequate renters insurance policy as part of your lease agreement. Make sure to check with your landlord to fully understand what your contract requires.


💡 Quick Tip: Did you know that, in most states, landlords can require tenants to carry a renters insurance policy? Fortunately, the average monthly cost is just $15.

Are There Ways to Save on Renters Insurance?

There are a variety of ways you can save on your renters insurance costs, these include bundling your insurance policies under one insurer, increasing the size of your deductible, and generally staying safe and claim-free. Here’s a closer look:

•   Bundle your insurance policies: Most insurance companies offer discounts for purchasing multiple policies through the same company. Purchasing renters insurance in tandem with other policies, like life or auto insurance, can result in cumulative discounts across all your insurance policies.

•   Increase your deductible: Raising the amount of your deductible increases your share of the costs in the event of a covered claim and consequently can lower the cost of your premiums.

•   Pay your entire premium at once: Some insurance companies offer a discount for paying your entire premium upfront as one annual payment rather than in monthly or quarterly installments. Check with your provider to see if they offer lump sum payment discounts.

The Takeaway

Renters insurance is relatively inexpensive when compared to other types of coverage, like homeowners, auto, or health insurance. However, it can prove invaluable in the event of any emergency that occurs on your rental property.

It’s a good idea to purchase a renters insurance policy when renting a home. Remember that your landlord’s homeowners insurance policy typically only covers their interests and generally will not reimburse your costs in the event of any incidents. Imagine losing all your possessions, or even just all of your clothes, to a fire. Or having a burglar break in and steal your electronics. Renters insurance can help minimize the pain by helping pay for you to replace what you’ve lost. That kind of peace of mind is well worth the usually inexpensive premiums these policies charge.

The Takeaway

Renters insurance is relatively inexpensive when compared to other types of coverage, like homeowners, auto, or health insurance. However, it can prove invaluable in the event of any emergency that occurs on your rental property.

It’s a good idea to purchase a renters insurance policy when renting a home. Remember that your landlord’s homeowners insurance policy typically only covers their interests and generally will not reimburse your costs in the event of any incidents. Imagine losing all your possessions, or even just all of your clothes, to a fire. Or having a burglar break in and steal your electronics. Renters insurance can help minimize the pain by helping pay for you to replace what you’ve lost. That kind of peace of mind is well worth the usually inexpensive premiums these policies charge.

Looking to protect your belongings? SoFi has partnered with Lemonade to offer renters insurance. Policies are easy to understand and apply for, with instant quotes available. Prices start at just $5 per month.

Explore renters insurance options offered through SoFi via Experian.

Photo credit: iStock/dragana991

Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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When you’re creating a will, you generally have two options: hire an attorney who specializes in estate planning or write a will online using software and templates. The second path is often used when someone has a more straightforward financial situation.

Either way, a will (or, more formally, a last will and testament) is an important legal document that makes clear how you’d like your assets to be distributed after you die. If there are minor children involved, it can also name the guardian.

If you think creating an online will is right for your situation, read on for a step-by-step guide for how to write a will online.

8 Steps to Writing a Will Online

To legally make a will, the testator (the person making the will) must be at least 18 years old and of sound mind — meaning they are generally aware of how much property and other assets they have and understand what they’re signing.

Assuming these conditions are met, here are the general steps to follow for writing a will online.

Step 1: Be Clear About Your State’s Laws

Each state has distinct laws when it comes to the number of people who must witness the will, whether the document needs to be notarized and more. Know what your state requires before you get started.


💡 Quick Tip: We all know it’s good to have a will in place, but who has the time? These days, you can create a complete and customized estate plan online in as little as 15 minutes.

Step 2: Choose the Software You’ll Use

A quick search of terms like “how to do a will online” will provide you with plenty of template options. You might also consider asking friends and family members if they’ve used a software that worked well for them.

Then, compare your options. Pay attention to factors such as:

•   Cost: Check pricing structures and fees. Some services will charge a flat fee for services rendered, while others may require a subscription to the site before you can make a will. What services are included in those fees? Which ones aren’t? Some sites have a yearly fee, which you may find worthwhile if the will is being reviewed one or more times a year by an estate planning attorney.

•   Ease of use: Just like with any other DIY service, some companies will guide you through how to make a will online more seamlessly than others. Find out how you can get answers to questions and if there’s any extra cost for this. Some sites may offer online support or provide a phone number to call. Check, too, to see if the company offers information on estate planning basics.

•   Company reputation: Only work with reputable companies. To investigate, you can read online reviews, search for news coverage of the company and check with the Better Business Bureau (BBB) for any complaints about deceptive practices.

Recommended: How Much Does It Cost to Make a Will?

Step 3: Name an Executor

After selecting a software, you’ll need to choose an executor, which is the person who manages the estate after the testator dies. Assets (what you own) and liabilities (what you owe) typically go into the estate, and it’s up to you to decide which assets to include in your will.

When you die, the executor is responsible for paying off outstanding debts and then appropriately distributing remaining assets to the beneficiaries, which are the people who receive assets from your estate as set out in your will. This process will include overseeing probate, a court-supervised proceeding where a will is confirmed as authentic, debts are paid off, and assets get distributed.

Additionally, it is the executor’s duty to keep your assets safe before distribution and otherwise manage financial issues until the estate is closed.

You’ll typically want to pick someone you trust as your executor, such as a family member or even an attorney. You can also choose more than one person to serve as your executor.

Step 4: Decide How You Want to Distribute Assets

As part of writing a will online, you’ll list your beneficiaries and what they will receive. For example, you might leave 100% of your estate to a spouse or significant other. Or, you may leave one-third of your estate to each of your three children.

For each of your beneficiaries, list their full legal name, contact information, date of birth and what assets they should receive. Focus on who would inherit your house, cars, bank accounts, and any other significant asset.

You may also decide to list a secondary beneficiary. This person (or people) would inherit your assets if the primary beneficiaries were to pass away before you do or otherwise won’t inherit. The will making software may refer to secondary beneficiaries as contingent beneficiaries.

Also keep in mind that there are asset distributions that aren’t covered by a last will and testament — in other words, your non-probate assets. Accounts where you name beneficiaries outside of your will can include retirement or pension accounts, life insurance policies, and certain bank accounts, among others. Because you’ve already named beneficiaries here, you won’t need to include these accounts in your will.

Recommended: Types of Wills

Step 5: Name a Guardian for Minor Children

In a will, you can also list who would take in your minor children (if any) in the event you were to die. This is an important decision, and you should verify that the guardian you plan to name would be willing to serve in this role.

This is also the area of the will where you can list specific wishes about how your child would be brought up, whether that’s related to religion or their education, and so forth.

Step 6: Follow State Laws to Sign Your Will

To make your will legal and binding, you’ll need to sign it according to your state’s laws. Typically, this means that you must sign the document in the presence of two witnesses who are not beneficiaries or direct relatives.

Step 7: Let Key People Know Where Your Will Is Located

Knowing how to make a will online and appropriately completing the process is important — but the process doesn’t quite end there. You’ll also want to let the executor and other key people know where the document can be found. You can put it in a safe or store it electronically as two possibilities.

Step 8: Update Your Will As Necessary

Every few years, review your will to see if any updates should be made. Also review the document if you encounter any major life changes, including:

•   Having a child or grandchild

•   Getting married or divorced

•   Becoming widowed

•   Experiencing a substantial change in your finances (for better or worse)

•   Developing significant health issues

•   Moving to a different state

Also update your will if you want to change your beneficiaries or what they’ll inherit.


💡 Quick Tip: It’s recommended that you update your will every 3-5 years, and after any major life event. With online estate planning, changes can be made in just a few minutes — no attorney required.

The Takeaway

When wondering how to write a will online, these steps will take you through the process. Once you’ve chosen a software service that’s right for you and your will is created, make sure to store it somewhere safe (and that people know where that is) and that you continue to make updates to your will as your life continues to change and evolve.

When you want to make things easier on your loved ones in the future, SoFi can help. We partnered with Trust & Will, the leading online estate planning platform, to give our members 15% off their trust, will, or guardianship. The forms are fast, secure, and easy to use.

Photo credit: iStock/monkeybusinessimages

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Whether it’s a cozy micro-cabin or a rambling Colonial, your home is probably the single largest purchase you’ll ever make and your biggest physical asset. An investment like that is worth protecting.

That’s where homeowners insurance comes in; it gives you peace of mind that if you were to have major damage or get robbed, there would be funds to repair and restore your home. But what happens when you think it’s time to change your policy?

Here’s what you need to know about switching your homeowners insurance policy, as well as a step-by-step guide to getting it done as quickly as possible and with a minimum of hassles.

Can I Switch Homeowners Insurance at Any Time?

Good news: yes! No matter the reason, you’re allowed to change your homeowner’s insurance at any time. This is good, since shopping around for the right policy can save you a lot of money in some instances.

If you’re shopping for a new home as we speak, it can be a good idea to start looking at insurance before you sign the purchase agreement. And if you’re an existing homeowner looking to save money or simply find a new policy, you absolutely can do so whenever you like. But it’s important to follow the steps in order to ensure you don’t accidentally have a lapse in coverage.


💡 Quick Tip: Homeowners insurance covers three basic categories: the building itself, the belongings inside, and your liability if someone gets hurt on your property.

When Should I Change My Homeowners Insurance?

There are certain events that should also trigger a review of your insurance, including paying off your mortgage (your rates may well go down) and adding a pool (your rates may go up). Also, you may find you are offered deals if you bundle your homeowners insurance with, say, your car insurance; that might be a savings you want to consider.

You never know what options might be available out there to help you save some money. And since homeowners insurance can easily cost more than $1,800 per year, it can be well worth shopping around.

Recommended: Is Homeowners Insurance Required to Buy a Home?

How Often Should I Change My Homeowners Insurance?

You’re really the only person who can answer this one, but in general, it’s a good idea to at least review your coverage annually.

However, it does take time and effort. Sometimes, a cheaper policy means less coverage, so it’s not always a good deal. Be sure you’re able to thoroughly review all the fine print and make sure you know what you’re getting.

Ready to change your homeowners insurance? Follow these steps in order to ensure you don’t accidentally sustain a loss in coverage!

Step One: Check the Terms and Conditions of Your Existing Policy

The first step toward changing your homeowners insurance policy is ensuring that you actually want to change it in the first place!

Take a look at your existing policy and see what your coverage is like, and be sure to look closely to see if there are any specific terms about early termination. While you always have the right to change your homeowners insurance policy, there could be a fee involved. In many instances, you may have to wait a bit to receive a prorated refund for unused coverage.

Step Two: Think about Your Coverage Needs

Once you have a handle on what your current insurance covers, you can start shopping for new insurance in an informed way. You probably don’t want to “save money” by accidentally purchasing a less comprehensive plan. But do think about how your coverage needs may have shifted since you last purchased homeowners insurance.

For example, the value of your home may have changed (lucky you if your once “up and coming” neighborhood is not officially a hot market). Or perhaps you’ve added on additional structures or outbuildings and need to bump up your policy to cover those.

Step Three: Research Different Insurance Companies

Now comes the labor-intensive part: looking around at other available insurance policies to see what’s on offer. Keep your current premiums and deductibles in mind as you shop around. Saving money is likely one of the main objectives of this exercise, though sometimes, higher costs are worth it for better coverage.

Make sure you are carefully comparing coverage limits, deductibles, and premiums to get the best policy for your needs. Also consider whether the policy is providing actual cash value or replacement value. You may want to opt for a slightly pricier “replacement value” so you have funds to go out and buy new versions of any lost or damaged items, versus getting a lower, depreciated amount.

In addition to the theoretical coverage you encounter, it’s a good idea to stick with insurers with a good reputation. All the coverage in the world doesn’t matter if it’s only on paper; you need to be able to get through to customer service and file a claim when and if the time comes!

Fortunately, many online reviews are available that make this vetting process a lot easier. A few reputable sources for ratings: The Better Business Bureau and J.D. Power’s Customer Satisfaction Survey, and Property Claims Satisfaction Study. You can also do some of the footwork yourself by calling around to get quotes, though this is time-intensive and you might want to simply use an online comparison tool instead.

Step Four: Start Your New Policy, Then Cancel Your Old One

Found a new insurance plan that suits your needs better than your current one? Great news! But here’s the really important part: You want to get that new policy started before you cancel your old one.

That’s because even a short lapse in coverage could jeopardize your valuable investment, as well as drive up premiums in the future. Once you’ve made the new insurance purchase call and have your new declarations page in hand, you are ready to make the old insurance cancellation call. Be sure to verify the following with your old insurer:

•   The cancellation date is on or after the new insurance policy’s start date.

•   The old insurance policy won’t be automatically renewed and is fully canceled.

•   If you’re entitled to a prorated refund, find out how it will be issued and how long it will take to arrive.

Congratulations: You’ve got new homeowners insurance!

Recommended: Should I Sell My House Now or Wait

Step Five: Let Your Lender Know

The last step, but still a very important one, is to notify your mortgage lender about your homeowners insurance change. Most mortgage lenders require homeowners insurance, and they need to be kept up-to-date on who’s got your back should calamity strike. Additionally, if you still owe more than 80% the home value to your lender, they may still be paying the insurer for you through an escrow account — so you definitely want to make sure those payments are going to the right company.


💡 Quick Tip: A basic homeowners insurance plan doesn’t cover floods, earthquakes, or sinkholes. If you live in an area prone to natural disasters, you may want to look into supplemental coverage.

The Takeaway

Homeowners insurance is an important but often expensive form of financial protection. It can help you cover the cost of repairing or rebuilding your home if you undergo a covered loss or damage. Since our homes are such valuable investments, they’re worth safeguarding. Plus, most mortgage lenders require homeowners insurance.

Sometimes, changing your policy can help you save money for comparable or better coverage. Reviewing and possibly rethinking your homeowners insurance is an important process, especially as your needs and lifestyle evolve. If you’ve added on to your home, put in a pool, bought a prized piece of art, or are enduring more punishing weather, all are signals that you should take a fresh look at your policy and make sure you’re well protected.

If you’re a new homebuyer, SoFi Protect can help you look into your insurance options. SoFi and Lemonade offer homeowners insurance that requires no brokers and no paperwork. Secure the coverage that works best for you and your home.

Photo credit: iStock/MonthiraYodtiwong

Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
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SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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