No one likes to think too long about their impending death, but as we age, buy homes and start families, it's one of those facts of life -- and death -- that we can't escape. You want to protect your loved ones from the financial burdens of your passing, and perhaps leave them a little cushion to take care of things when you no longer can.
Before you search for life insurance quotes, however, there are several factors to consider.
Alaska Life Expectancy
Despite the fact that many Alaskans play hard and live hard, residents of the Last Frontier live just as long as their American counterparts in the continental U.S. According to census data:
- The life expectancy of Alaska residents is 78 years old.
- The leading causes of premature death in Alaska include:
- Heart disease
- Chronic lung disease
- Liver disease
While we can do much to mitigate our risks to some of these causes of death, accidents can and do happen, with all too much frequency in Alaska.
What Is Life Insurance?
Life insurance comes in many varieties and coverage options. Some policies provide end-of-life and funeral expenses only, ensuring your Alaska loved ones aren't put in a financial bind as they grieve their loss. Others can provide financial investment tools and provide extensive support to those you leave behind. The type of life insurance you need depends on what you want the policy to do for your family and loved ones.
The two most common forms of life insurance policies are term life insurance and whole life insurance.
What Is Term Life Insurance?
The features of term life insurance available from most Alaska insurance companies include:
- Provides death benefits only
- Pays benefits only if you die while the term of the policy is in effect
- Easiest and most affordable life insurance to buy
- Purchased for a specific time period, such as 5, 10, 15, or 30 years, known as a “term”
- Becomes more expensive as you age, especially after age 50
- The term must be renewed if you want coverage to be extended beyond the term length
- Can be used as temporary additional coverage with a permanent life insurance policy
- Can be converted to whole life insurance
What Is Whole Life Insurance?
The majority of Alaska insurance companies offer these features with their whole life insurance policies:
- Covers you for life
- Provides death benefits as well as a cash value accumulation that builds during the life of the policy
- You typically must qualify with a health examination
- Can be purchased without a medical exam, but at a higher cost
- Takes 12 to 15 years to build up a decent cash value
- Can be a good choice for estate planning
- Cash value is based on how much the return on investment is worth
- A portion of the cash value can be withdrawn or borrowed during the life of the policy
- Initially has more expensive premiums than term life insurance, but can potentially save you money over the life of the policy if in force for a considerable number of years
Which Type of Life Insurance Is Best for Me?
When choosing between whole life or term life insurance, there are a number of variables to take into account. A qualified Alaska insurance agent can help you evaluate each of the following aspects of your circumstances and determine whether term life or whole life is a better option for you. The factors to consider include:
- Your current age
- Your health
- Financial needs of your family
- Plans for funeral and death expenses
- The age of your children
- Long term health expenses in the event of a serious illness
- Your mortgage and current debts
- When you plan to retire and the retirement plan you have in place
- Future needs of your family, such as your children’s college tuition
- Your need for an additional retirement savings plan
- Your plans and concerns regarding setting up an estate and ramifications for estate taxes
- Your intention to set up a trust as part of your will
- Whether you want to donate life insurance proceeds to a charity
- Your feelings on potentially paying into a term policy and never receiving any of that value back
For example, a 35 year old primary breadwinner of the household with young children may want to consider buying a term life policy that would fully cover the family’s financial obligations.
Alternatively, this person could purchase a whole life policy that will not only pay that policy face value if they should die before their children are through college, but would also accrue a cash value that would provide additional benefits to his or her family or a growing fund of emergency money.
Many term life insurance policies are able to be converted into whole life insurance policies as circumstances change. Be sure to ask your agent if the policy you are reviewing has this option.
What Will My Life Insurance Quote Look Like?
A basic life insurance policy for a young, non-smoker may be quoted at as little as $15 per month for funeral expense coverage and other end-of-life costs. On the other hand, a more comprehensive policy including interest on cash deposits could cost a middle aged smoker close to $1,000 for large payouts upon his death.
Most Alaska insurance companies use complex algorithms to calculate their life insurance premium quotes. They take several factors into consideration as they estimate your quote, including:
- The type of life insurance: Term insurance costs less than permanent life insurance because it only pays a death benefit and does not build up cash value.
- How much life insurance you need: A $20,000 term policy will have far lower quotes than a $1 million term insurance policy.
- Your age: Quotes for life insurance climb significantly as you age.
- Your health: If you have no health conditions, your costs will be lower than if you have heart disease, diabetes or other chronic conditions.
- If it is medically underwritten life insurance: While it is possible to buy “no exam life insurance,” your costs will be much higher because the life insurance company is taking a higher risk to insure you than if you took a medical exam.
Note that every life insurance company uses its own mathematical equations to determine individual ratings and premiums. No two life insurance companies will quote the same costs for the same person, and the cost of life insurance can vary widely. For this reason, it is important to compare multiple quotes before choosing to buy a policy.
Where Can I Find Life Insurance in Alaska?
The last thing you want to leave your loved ones is a stack of debt and few resources to help them after you are no longer here for them.
Knowledgeable, independent insurance agents on the Trusted Choice network are always available to answer your questions, suggest coverage options, and even assist your family members in filing a claim upon your death. These agents have years of experience working with Alaska insurance companies, enabling them to find a number of quotes with the best coverage options at the most affordable rates. Contact a Trusted Choice member agent near you to find out how you can obtain a life insurance policy that meets your family's needs and budget.