Life Insurance in USA

Life insurance is an essential part of your financial plan if you have anyone in your life who depends on your income for financial support. 

Unfortunately, many people choose to go without life insurance, or they don't have the right type of coverage, or the right amount of protection. 

About half of all U.S. households have less life insurance than they actually need, according to the Life Insurance Marketing and Research Association. 

A separate study by employee benefits provider Unum finds that about a third of all households will experience financial difficulties within the first month of losing the income from a primary breadwinner, should that person die. 

The good news is that life insurance does cost a lot less than most people expect.

In fact, many people expect life insurance to cost up to 5 times more than it actually costs, according to a survey from the Insurance Information Institute (III). 

We help make your process of shopping for life insurance as easy as possible by doing the research for you and rating the top life insurance carriers. 

How Does Life Insurance Work?

Life insurance is a written contract between an insurance carrier and the person who purchases the life insurance policy – also known as the policy owner.

The insurer agrees to pay out a death benefit to the beneficiary of the life insurance policy upon the death of the insured person, subject to the terms, conditions and exclusions stated in the policy. 

In return, the owner of the insurance policy agrees to make regular premium payments to the insurance carrier. The owner also chooses who is the beneficiary of the insurance. The insured person may or may not be the one (owner) who pays the premiums.

 

What is Term Life Insurance?

Term life is a type of life insurance policy that provides coverage for a specified number of years. The life insurance is temporary, lasting for a specific "Term".  

Usually, you may choose a term lasting for a period of 10, 15, 20, 25 or 30 years.

If the insured person dies during the policy term, the death benefit is paid out by the insurer to the beneficiary of the policy.

If the insured person is alive when the policy term expires, there is no benefit paid out and the coverage ends.

 

What is Whole Life Insurance? 

Whole life is life insurance that provides guaranteed lifetime protection, as long as the premiums are paid on time.

A whole life policy provides a death benefit and builds cash value inside the policy over time. 

Whole life usually costs up to 5-10 times more for the same amount of life insurance compared to the cost for a term policy.

The additional cost is due to the fact that all death benefits are paid out on whole life insurance policies, unless the policy is no longer "In Force". Insureds do not outlive the duration of the whole life policy, as they may with a term insurance policy.

Also, a loan may be taken out on the cash value in the policy, if needed.

 

How to Buy Life Insurance?

You can purchase a life insurance policy by applying for coverage online, or by meeting with an insurance agent and completing the application form in person.

Once the application is complete, a physical exam may be required, and the insurer will also look into your health records, driving record and other necessary information to determine if you meet the qualifications to be insured by the life insurance company.

Online applications for life insurance may offer no exam coverage and allow you to start your life insurance the same day you apply online.

Whereas, when you meet with an agent and fill out the application form in person the underwriting process may take up to 4-6 weeks to find out if you meet the qualifications for approval to get insured.

 

How to Choose The Best Life Insurance Company

 

Buying a life insurance policy is similar to buying a home, in that you are paying for something that will be part of your life for many years to come. 

Just as you inspect a home before you buy it, you should evaluate any insurance company before purchasing a life insurance policy. 

Follow these guidelines to make sure the insurance carrier you are considering is a solid, financially sound company, and is expected to be around for many years to come.

• Financial Strength: Review the financial strength rating from A.M. Best for the carrier to determine if the company is financially sound. This rating is based on an assessment of a life insurance company's financial health – their ability to meet their financial obligations and pay their claims on the life insurance policies they issue. 
• Years In Business: How long has the insurer been in business – when were they established? Carriers that have a long track record of doing business are more likely to be around for many years.
• Customer Service: Working with your life insurer shouldn't be a hassle. The best carriers have easy-to-use websites, short hold times when you call with a question, and agents who give you advice based on your specific insurance needs, not their commission. Review consumer reviews to help you understand what to expect when it comes to your insurer’s quality of customer service. Also, ask your friends and family members about their own experience with the insurance company you are considering for your coverage.
• Policy Types: Not all insurers offer every type of life insurance policy. Rather than choosing the wrong type of policy because you like the company, start out with a company that sells the kind of coverage that best fits your family’s needs. 
• Company Size: All else being equal, companies that hold the most assets are likely to be the most solvent, and therefore are less likely to run into financial trouble and possibly leave you or your loved ones holding a worthless life insurance policy when it comes time for your beneficiary to make a claim on your policy for payment of the death benefits. 

Best Life Insurance Companies in the USA for 2020

 

Haven Life:    Rated A++ Superior by A.M. Best Company

Haven Life offers only term life insurance policies and utilizes an online application process without personal interaction with a traditional life insurance agent. While a relatively new player in the insurance business, it's backed by MassMutual. Haven Life aims to offer affordable, easy-to-manage term insurance policies online, without the usual hassles of shopping for life insurance.

 

Northwestern Mutual: Rated  A++ Superior by A.M. Best Company

Northwestern Mutual has more than 160 years of experience in the financial services industry and offers a traditional approach to life insurance protection. Northwestern Mutual offers a variety of coverage options and a personalized method of determining your insurance coverage needs, and its financial advisers are available to help customers through the entire buying process.

 

State Farm:    Rated  A++ Superior by A.M. Best Company

 

MassMutual:  Rated  A++ Superior by A.M. Best Company

 

Nationwide: Rated  A+ Superior by A.M. Best Company

 

New York Life: Rated A++ Superior by A.M. Best Company

 

Mutual of Omaha: Rated A+ Superior by A.M. Best Company

 

Types of Life Insurance Policies

 

There are several different types of policies available to meet specific types of needs.

Some plans offer short term protection at low prices, while others offer lifetime protection at much higher premiums.

You’ll want to take into consideration the following before choosing a policy:

1. How Long do you need your life insurance protection to last?
2. How much can you afford to spend each month on your coverage?
3. How much life insurance do you really need?
4. What goal do you want your life insurance to accomplish?

 

Life Insurance Policy Types

• Term Life Insurance: Temporary protection that covers the insured person for a predetermined length of time, typically ranging from 10 to 30 years. When the term ends, there is no benefit to the insurance policy. Though no cash value accumulates, the premiums for term policies are usually much lower than premiums for permanent policies. 
• No-Exam Life Insurance: Life insurance that doesn't require any health examination. Some plans offer same day protection which you can apply for online.
• Accidental Death Insurance: Life insurance policy that pays out a death benefit only if the insured person dies as a result of a covered type of accident. And, the insured usually must die within 6 months or less of the accident.
• Permanent Life Insurance: Long-term insurance coverage that includes whole life and universal life policy types. These are more much expensive than term life plans, but offer more benefits. This category is sometimes called cash value life insurance because of the savings like cash value account that's built into the policy which allows for loans to be taken. 
• Whole life insurance: Permanent insurance policy that has consistent premiums and guaranteed accumulation of cash value inside the policy over time. This policy type may be eligible for dividends from a mutual insurance company and typically is expensive compared to term life. 
• Universal Life Insurance: Permanent coverage that builds cash value over time inside the policy. It's frequently offered with flexible premiums; however, the premiums will affect the cash value and death benefit provided by the policy. 
• Indexed Universal Life Insurance: Universal life insurance that accumulates cash value based on the performance of a specific market index such as the S&P 500. This type of life insurance policy is typically less expensive and less risky than a variable policy, because there is no actual investment in an index.
• Variable Life Insurance: Permanent life policy that ties cash value accumulating inside the policy to a number of different investment options available. These options may be based on whole life or universal life insurance coverage. 

What is a Death Benefit?

Death Benefit: The amount of money the insurer pays your beneficiaries after your death. This is often a tax-free payment that can be paid as a lump sum or in installments, depending on your policy. You typically select the amount of coverage when you purchase your life insurance policy.

 

How Much Life Insurance Do I Need?

Determining the right amount of life insurance coverage requires balancing how much money your beneficiaries may need in the future with a premium payment you can afford to pay now and going forward. 

First, ask yourself these questions:

Who is Dependent on Your Income? 

In addition to your spouse and your children, does this list include aging parents, siblings, family members, or business partners?

How Long Will Your Family Be Dependent on Your Income? 

The answer to this question often dictates if a term life or permanent life insurance policy is best suited for you and your family. 

Keep in mind, children usually become self-sufficient after graduating from college, and a spouse may no longer need supplemental income after they begin using funds in their retirement accounts. 

What Large Expenses Will Life Insurance Proceeds Provide for in The Future? 

Common expenditures include paying off the mortgage loan on the family home, sending your children to college, or helping to pay for your child’s future wedding costs. 

What Other Debts Do You Want to Pay Off?

Some debts held in your name may disappear after your death, but you may want to pay off debts jointly held with your spouse, and/or cover estate taxes that your heirs may owe upon your passing. 

What End-of-Life Expenses Do You Want to Cover? 

This may include funeral expenses, burial costs, hospital and medical bills for an extended illness.

What Assets Do You Currently Own? 

Cash accounts, stocks, bonds, real estate, gold, silver, collectibles, investment accounts, other life insurance policies, and retirement accounts, are all assets that can help support your beneficiaries when you die. 

Finally, we recommend you use a life insurance needs calculator to assist you in determining how much life insurance to buy. It's quick, easy and there's no delays. You just answer some basic questions, click on a button, and instantly see how much life insurance is right for you.

How to Get the Cheapest Life Insurance Policy

One of the main factors affecting your cost for life insurance is your age. There isn't much that you can do that, but there are other ways you can save money on your policy. 

Premium rates vary from one insurer to the next, even for a similar type of policy. 

And while some pricier policies come with additional benefits, it isn't a guarantee that paying more gets you better coverage for your beneficiary. 

That’s why you want to make certain you compare life insurance policies side-by-side to better understand the terms and benefits of each type of policy when shopping for coverage.

Married couples searching for affordable life insurance protection should be aware that the carriers with the lowest rates for women don't always have the lowest rates on life insurance for men.

Qualifying for a lower rate is one more big reason to take care of your health. 

Smoking or using other nicotine products can significantly increase your premiums. Smokers may pay up to 5-10 times more for the same amount of life insurance coverage compared to pricing for Non-Smokers. 

Life insurance companies also evaluate other health factors that may impact your longevity (life expectancy), such as your weight, blood pressure, cholesterol levels, and blood sugar levels.

 

Save on Life Insurance Using These Tips

• Buy Term Life Insurance. Whole life insurance costs up to 5-10 times more for the same amount of life insurance compared to the cost of term insurance.
• Compare Pricing from Several Insurance Carriers. Get a FREE Quote.
• Buy Life Insurance While You are Young. Rates for life insurance increase with age, so you want to lock-in the lowest rate as soon as you can.
• Quit Smoking if You Smoke. Smokers pay up to 5-10 times more for the same amount of life insurance compared to Non-Smokers.
• Lose Weight if You are Overweight. People who are overweight or obese are charged a higher rate because they have a greater risk of developing health issues and dying sooner than someone who is not overweight.
• Pay Premiums Annually – Once per year. Insurers charge an additional service fee for the processing of monthly premiums.
• Coverage Amount – Don’t buy more life insurance coverage than you really need.

 

Key Factors That Influence Life Insurance Premiums

 

Personal Risk Factors

• Age – Rates are based in part on your age. The older you are when you purchase a policy, the higher your rate.
• Gender – Women live longer than men in general, which is why they pay lower rates on life insurance.
• Weight and Height – If you are overweight or obese, you will be charged a higher rate for your coverage.
• Medical History – If you have a history of health issues, your rate will be higher than the standard rate for life insurance.
• Marital Status – Some insurers offer lower rates for people who are married, because marriage can be a stabilizing factor and lead to a longer life.
• Occupation – People with a high-risk job will be charged a higher rate for coverage.
• Hobbies – Higher rates are charged to insure people who take part in high risk hobbies; such as, B.A.S.E. jumping, skydiving, race car driving, mountain climbing, etc.
• Income – Does your income support the amount of life insurance you need?
• Debts – People with a bankruptcy or poor credit would be considered a higher risk and pay a higher rate for life insurance.
• Smoking and Alcohol Consumption – Those who drink and or smoke regularly will have a higher risk of health issues including heart disease, so they would pay a higher rate for life insurance.
• International Travel – Regular travel to high risk third world countries may increase your risk of an early death, so the insurers would likely charge a higher rate for your coverage.

 

Life Insurance Quotes in USA

 

Top Pick – JRC Insurance Group

JRC Insurance Group helps you shop, compare and save on life insurance. Regardless of your age or health background, we'll shop our 40+ insurance companies and find you affordable life insurance you need to protect your family and fit your budget. Compare the best life insurance rates for savings up to 73%. Get Your FREE Quote.

 

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