Are you searching for Florida life insurance options? Here’s an extensive guide on choosing the best policy for your needs.
Only 50% of Americans report having some type of life insurance policy in 2022. That leaves about 106 million adults who aren’t covered by life insurance or find themselves underinsured.
While most adults would agree that protecting their loved ones with life insurance is important, they also don’t understand that life insurance can represent more than end-of-life expenses.
So, why do so many Americans not have life insurance? Is it fear of facing their own mortality or fear of the cost of insurance?
If you need life insurance, then this guide is for you. Read on for more on getting Florida life insurance and what you should consider.
Types of Life Insurance in Florida
One of the first things to understand before you seek information from life insurance companies in Florida is that there are various types of life insurance.
One isn’t necessarily better than the other, but each type meets a specific need and has advantages.
Let’s start by looking at the types of life insurance and how they can each provide valuable coverage.
Term Life Insurance
Term life insurance is one popular life insurance option. The basic premise for term life insurance is that you decide on the benefit amount and for how long you need coverage. Then you pay the premium during that period of time.
For example, you might want $100,000 in life insurance coverage. You expect, based on your age, expenses, and overall need to require life insurance for the next 20 years.
The insurance company sets a rate based on these factors. During the term of the policy, as long as you pay the premiums, you’ll be covered. At the end of the term, the policy ends.
Some term policies offer the option to extend the term as it nears the end of the policy. Yet, you should be prepared for a rate change since the term extension will be based on your current age, not your original age when you started the policy.
Term life insurance usually works for people who want coverage while they have underage children or have bills like a mortgage or kids to put through college. It tends to be less costly than other types of life insurance options.
Types of Term Insurance
Level-term insurance is the most common term life insurance. For this type of term coverage, the benefit amount remains the same throughout the term of the policy. In many cases, the premium remains constant, too.
If you die during the term, your beneficiaries are paid the benefit amount.
Another type of term insurance is the yearly renewable term life insurance policy. In this policy, there isn’t really a term.
Instead, the policy can be renewed yearly. This is an expensive option since the rate will adjust based on your current factors each time you renew.
Finally, there’s the decreasing term policy type. In this type of term life insurance, the rate is set for the policy term.
Yet, the benefit amount decreases over time. It tends to be a little less costly since the death benefit gets reduced over time.
Advantages of Term Life Insurance…
There are a few advantages to consider with term life insurance.
First, the cost of this type of policy tends to be lower since you’re only covered for a certain period of time. Once the policy term ends, the insurance company will never have to pay a death benefit if you’re still living.
Because this policy is lower, more people can get insured. You can also get insured for the period when you’re most likely in need of life insurance coverage.
Permanent Life Insurance
The most common other type of life insurance is permanent life insurance. Unlike term insurance, which expires at the end of the term, permanent life insurance keeps you covered until you die as long as you continue to pay your premiums.
When seeking permanent life insurance, you must make a few decisions. You’ll need to decide how much coverage you want with your policy. Second, you’ll need to decide on a type of permanent life insurance policy.
Type of Permanent Life Insurance
The most common type of permanent life insurance is whole life insurance. With a whole life policy, you are covered for your whole life as long as premiums are paid.
At the onset of the policy, you decide what death benefit amount you want for coverage and pay the premiums. When you die, your beneficiaries are paid your death benefit amount.
One reason many people like whole life permanent insurance is that while you pay your premiums, the policy also works like an investment and, over time, can build up cash value. More on cash value shortly.
Universal or adjustable life is another type of permanent insurance. Like whole life, this type of permanent insurance can build up cash value. As long as premiums are paid, you remain covered.
The key difference of universal adjustable life is that the premium and death benefit amounts can be adjusted as you go through your life. You may opt later in life to reduce your premium amount or death benefit amount.
Universal adjustable life tends to be a little less costly than a whole life policy. But if you choose to increase your death benefit later in life, the new rate will be based on your older age and therefore be more costly.
Advantages of Permanent Life Insurance
In addition to paying life insurance for a death benefit, the advantage of a permanent policy is that you can build up the cash value. The cash value can build with time as you invest in the policy.
You can borrow against the cash value and, in some cases, even use it towards your premiums if needed.
Some savvy investors even use this type of life insurance to put away money for later in life when they max out their other investments.
Factors for Life Insurance
Florida insurance companies will consider many factors when quoting you a price for life insurance. Likewise, there are several factors you should consider when deciding on life insurance and which option is right for you.
Age
Age is a factor for you and the insurance company regarding life insurance.
No matter what type of life insurance policy you seek, the younger you are when you get it, the less it will cost. You’re less likely to die at a younger age, and therefore, it’s less likely the insurance company will need to pay out a death benefit.
Many younger people scoff at the idea of life insurance thinking they don’t need it yet. The reality is that the younger you get it, the less costly it will be.
Remember that if you opt at a young age to invest in a whole life policy, you can build the cash value of the policy over time in addition to the death benefit amount you select.
Gender
Gender is also a factor in the cost of life insurance costs. Life insurance companies know that statistically, men live shorter life spans than women.
This means that an insurance company is more likely to need to pay a death benefit for a man than a woman, so the rates will be slightly higher for men, generally speaking.
Health
Most life insurance companies will want you to undergo health screenings or a physical before providing your life insurance options and a quote.
They will factor your overall health into their quote. Factors like if you’re a smoker or have a heart condition can impact your options for a policy and what rate you’ll pay since these conditions make you a higher risk to insure.
Duration
Duration is how long you want or need coverage. This is a personal choice and one that requires careful consideration.
If you have young children, you might want to know you’re covered until they will likely be independent of you. If you have a mortgage and want to know if your family can continue to live in their home without you, you probably want a policy that is in place until the house is paid off.
Type of Insurance
You already know some about the different types of life insurance policies. Talking with an experienced life insurance agent about your personal situation makes sense.
They can help you consider all the factors that might impact your life insurance policy coverage. It’s important to be forthright with an insurance agent so they can most effectively evaluate your specific needs.
Buying Life Insurance
As you prepare to get life insurance, here are some steps you can take to make sure you end up with the most effective policy for your needs.
Here are some steps to take as you consider life insurance.
Assess Your Personal Financial Situation
One of the first things you should do is consider your financial situation. It may even make sense to sit down with your financial planner as part of the process.
You want to consider your needs for loved ones and how much money they would need in a death benefit to be protected after you’re gone. To do this, you need to consider your own debts.
You also need to consider what other sources of money might be available to them, including:
- Emergency fund
- Retirement savings
- Life insurance coverage through work
Then you’re more equipped to forecast your life insurance amount needs.
Calculate Your Insurance Needs
Most people underestimate the real amount of life insurance they would need. They only consider their debt.
You want to consider the ages of your children and your spouse. How long might they need your income? Is there money in place for college for your children?
Your spouse may need to adjust what they did, working or not, if you’re no longer living. This could impact financial needs.
Generally, insurance agents suggest ten times your annual salary as a good place to start for coverage.
Consider Policy Type
Then you need to consider what type of insurance best meets your needs.
How long can you anticipate needing coverage? If you plan on term insurance, this typically comes in 10-, 15-, 20-, or 30-year terms. While nobody can predict how long they’ll live, you can consider your other life factors.
If you like the option of permanent insurance, consider all the factors to find a premium rate that will work for your budget.
Know What Impacts Your Rate
You already know things like age, gender, and your overall health impact your life insurance premium rates.
If you’re a smoker, consider quitting before you seek coverage. Ultimately, the two biggest factors for life insurance rate are the coverage you want and your age.
Compare Life Insurance Companies and Rates
Once you have considered all these factors, it makes sense to do some homework about our options for coverage. Many insurance agents will work with multiple insurance companies to provide you with options.
When comparing rates, ensure that the policies offer the same coverage. You always need to read the fine print.
Most insurance agents can even provide a comparison chart on rates and how different policy coverages will impact rates.
Apply, Answer, and Be Truthful
Once you’ve decided on a policy, you’ll need to do an application. You should prepare to answer a whole host of questions from the insurance company.
Gathering information about you is how they set their final rates for you. You should prepare to have a physical or a minimum health screening as part of the process.
Always answer all questions to the insurance company truthfully. It makes no sense to lie and get canceled later because you weren’t forthcoming.
Finding the Best Florida Life Insurance
Florida life insurance options may feel daunting initially, but it doesn’t need to be complicated. Once you understand some life insurance basics, you’ll be well-equipped to find the right policy for you.
If you need a Florida life insurance company to help you through the process, we are here to assist you. Contact us so we can answer all your life insurance questions and find you a policy that’s a good fit for you and your loved ones.