Connecticut is a great place to live. Your home or business and everyone you love may be here. If a disaster or illness strikes, do your loved ones have protection in the event you are no longer there to care for them? Finding the right life insurance policy can be a complex and time-consuming effort. Before you search for quotes on life insurance, however, it's a good idea to familiarize yourself with the various options available.
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Living Large in CT
The good news is that Connecticut residents tend to live much longer than most Americans do:
- The life expectancy of Connecticut residents is 80.18 years, whereas the life expectancy of the average American is 78.61 years.
- The leading causes of death in the Nutmeg State are heart disease, cancer, stroke and lung disease.
- Accidents are the fifth leading cause of death in this state.
- Most people do not opt to purchase a life insurance policy until they are older, making the policy more expensive.
Why Is Life Insurance Important?
Are you married? Do you have children? Do you own your own business, and therefore have many people relying on you? Do you care for your aging parents?
Regardless of your circumstances, chances are there are several people in your life who depend on you. Life insurance can be there for them when you no longer can be.
With the average cost of funerals these days quickly approaching, and sometimes exceeding, $10,000, a sudden death can set surviving family members back financially in significant ways.
Whether you want to be sure your children have funds for college tuition, your spouse can remain in the home you built, or you simply want to ensure you will have a proper burial, Connecticut providers have a life insurance policy that meets your needs.
What Does Life Insurance Cover?
A basic life insurance policy provides death benefits and is designed to cover loss of income, end-of-life expenses, funeral costs and other financial requirements your loved ones may have should you die unexpectedly.
Life insurance is a very flexible type of protection that you can use to protect your loved ones in various ways:
- Cost of living: Life insurance can cover your family's important expenses after your death, such as paying the mortgage, paying down outstanding debts and affording your children’s college tuition.
- Trusts and charities: You can use a life insurance policy to create a trust as a financial legacy for your dependents, a chosen charity or a civic organization.
- Retirement and estate planning: You can structure a permanent life insurance policy to cover your living costs during your retirement or for estate planning. You can even structure it to cover the cost of your life insurance premiums.
- Business continuation: Business owners often purchase life insurance to help protect their business in the event they die unexpectedly. For example, a business owner can construct a buy-sell agreement that pays benefits to one or more surviving co-owners, who can then purchase the policyholder's share of the enterprise.
What Is Term Life Insurance?
Most Connecticut insurance companies will allow you to choose from term or whole life insurance. The differences between the two are many, but each provides protection in its own ways.
Deciding whether to purchase whole life or term life insurance is a personal decision that you should base on the financial needs of your beneficiaries as well as your financial goals.
These are some term life insurance features:
- 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 period, such as 5, 10, 15 or 30 years, known as a "term"
- Becomes more expensive as you age, especially after age 50
- Is renewable once the initial term is exhausted
- Provides temporary additional coverage to supplement a permanent life insurance policy
- Is convertible to whole life insurance
What Is Whole Life Insurance?
Unlike term life insurance, whole life insurance, sometimes called permanent life insurance, is long-lasting. You can use this type of policy as an investment vehicle, as it also serves as financial protection for surviving loved ones.
A variation of whole life, universal life, provides a savings element known as a cash value account. You can change the death benefits during the life of the policy, usually after passing a medical examination, and you can pay premiums from your accumulated cash value.
These are some of the features of whole life insurance:
- Covers you for life
- Provides death benefits as well as a cash value accumulation that builds during the life of the policy
- Typically requires a health examination prior to acceptance
- Is available 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 your Connecticut estate planning
- Return on investment determines the cash value, which you can withdraw or borrow during the life of the policy
- Initially has higher 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
What Will Your Life Insurance Quotes Look Like?
The quotes you receive for life insurance will vary significantly depending on a number of factors. The quotes can be anywhere from $15 a month for a young non-smoking woman to well over $1,000 a month for a middle-aged male who has a pack-a-day habit.
Life insurance companies use a rating system based on a number of risk factors such as a person’s age, tobacco use, overall health status, occupation and a variety of other considerations when calculating quotes.
A person who is relatively young, does not smoke and is healthy will likely get a much better rating than someone who has an underlying health condition or risky health habits. Health conditions, high-risk jobs and tobacco use can all make a policyholder risky for an insurance company to cover. A healthy person with a good rating is less of a risk to insure, so that person’s premiums will be lower than premiums for a higher risk person.
Some factors that will affect your quotes include the following:
- The type of life insurance you choose: Term insurance costs less than permanent life insurance because term insurance only pays a death benefit and does not build up cash value. Most older people choose term life insurance as their dependents are grown and no longer rely on their income.
- How much life insurance you choose: A $20,000 term policy will cost far less than a $1 million term insurance policy.
- Your age: The cost increases significantly as you age.
- Your health: If you have a clean bill of health, your costs will be lower than if you have heart disease, diabetes or other chronic conditions.
Remember that every Connecticut life insurance company uses its own calculations to determine individual premium quotes. No two life insurance companies will quote the same costs for the same person, and the cost of life insurance can vary widely. That's why it is important to compare multiple quotes before choosing to buy a policy.
Can't Live Without Life Insurance?
You know the reasons why life insurance is important. You kiss them goodbye every morning and squeeze them goodnight every evening. But finding a life insurance policy that will allow you to rest easy and will provide for your loved ones long after you're gone can be complicated and time-consuming. When you contact a knowledgeable Trusted Choice® independent insurance agent, you can be sure that the agent's experience and connections will simplify this process for you.
Talk with one of our independent agents to find quotes on life insurance that fits your needs, lifestyle and budget, and then get back to living.