You have worked hard to make a life in Delaware for you and your family. No one likes to think about their eventual death and the ramifications an early departure may have for their loved ones. However, as they have come to rely on you for a number of things, the luxury of postponing those thoughts is no longer yours. Only a comprehensive life insurance policy will protect those you care for, long after you cannot.
Before you search for life insurance quotes, however, there are several things to keep in mind.
Most Delaware insurance companies offer life insurance that falls into one of two categories: term and whole (permanent). The differences between the two are significant, and the type you choose depends on a number of factors, including your family's needs and your financial goals.
This type of policy comes in two basic varieties: level term and decreasing term.
A level term policy, the most common variety, pays the same benefit amount if death occurs at any point during the term.
A decreasing term policy will pay a lower amount during the term of the policy.
Both types of term life insurance can be purchased at 1, 5, 10, 20 and even 40 year intervals and anything in between. The most common type is the 20-year term policy. Be aware that most Delaware companies will not sell term insurance for a term that ends past your 80th birthday. Also keep in mind that once these policies expire, you will need to either purchase a new policy or speak with your insurance agent about renewing it (which isn't always possible - check with your agent).
Typically, the quote for a term policy will be based on your age and health at the policy’s purchase and the premium will remain the same throughout the length of the term. For example, quotes for a five-year renewable term will be level for five years, then change to a new rate reflecting your new age and health at the time of the policy’s renewal. Some longer term policies will guarantee that your premium will not increase during the term; others don’t make this guarantee, which means the insurance company could raise your rate during the policy’s term.
Some term policies are convertible, meaning that you can change them into permanent life insurance policies without having to prove your insurability. Be sure to ask your insurance agent about this feature, especially if you anticipate significant life changes in the future, such as getting married and having children.
Whole, otherwise known as permanent, life insurance pays a benefit to your beneficiaries following your death—there is no age limit. Most Delaware insurance companies offer four main options for permanent life insurance:
Whole or ordinary life: This is the most common type of permanent policy. It offers a death benefit and a savings account. You will pay a set amount in premiums on a regular basis for a specific death benefit (for example, $300,000). The policy’s savings vehicle will grow based on dividends the company pays to you.
Universal or adjustable life: This policy provides more flexibility than whole life insurance. You may be able to increase the death benefit if you pass a medical examination. The savings vehicle, called a cash-value account, generally earns a money market rate of interest. After money has accumulated in your account, you will also have the option of altering your premium payments—if there is enough money in your account to cover the costs.
Variable life: This policy combines a death benefit with a savings account that you can invest in stocks, bonds, and money market mutual funds. The value of your policy will likely grow more quickly, but you’ll also have more risk. Some policies guarantee that your death benefit will not fall below a minimum level.
Variable-universal life: With this type of policy you get the features of variable and universal life policies. You have the investment risks and rewards characteristic of variable life insurance, coupled with the ability to adjust your premiums and death benefit that is characteristic of universal life insurance.
As a basic rule, if you want an investment tool with your life insurance, a permanent policy is the best choice. If you desire only the death benefit, a term policy is the route to take. Some Delaware insurance companies advise their clients to keep their life insurance and their investments separate. If you already have a comfortable investment package set up, a term life insurance policy may be your best bet.
Insurance companies use complex algorithms to calculate the quote for a whole, or permanent, life insurance policy. One important fact to remember is that the younger you are when you buy a life insurance policy, the cheaper your premium will be. The younger and healthier you are, the lower your quote. Regardless of the policy, life insurance becomes progressively more expensive as you age.
The Delaware insurance company you work with to find a quote will most likely take the following into account:
Life insurance is complex and the choices you make can have long lasting effects on your Delaware family and loved ones. Knowledgeable independent insurance agents in the Trusted Choice® network are always here to help answer any questions you may have about life insurance, suggest coverage options, and even help file a claim.
The agents' years of experience in working with Delaware insurance companies enables them to find only the most competitive rates on quotes from a variety of providers.
Contact a Trusted Choice agent in your area to find out how you can better provide for your family with a life insurance policy that meets your needs and budget.