Having life insurance is one of the best things you can do for your family. These policies help to ensure that your dependents and loved ones have financial stability after you’re gone. This can be especially important in the unfortunate event that you pass away unexpectedly during your prime earning years.
But how do you know which policy is right for you?
Local independent agents have offered thousands of Minnesota residents guidance and advice about all kind of insurance products. These agents can help you find a competitively priced life insurance policy that is right for you. Find an insurance agent near you to learn more.
What Are the Top Five Causes of Death in Minnesota?
The CDC tracks causes of death across the country. In Minnesota, the most common causes are the following.
- Heart disease
- Accidents / unintentional injuries
- Alzheimer’s disease
- Chronic lower respiratory disease
It is worth noting that accidents are the third leading cause of death in this state. Accidental deaths are usually sudden and leave no time to plan for the financial safety of loved ones left behind.
Why Do Minnesota Residents Need Life Insurance?
Unlike car insurance, life insurance is not required by law. That doesn’t mean it's not a wise investment. You need to evaluate your own life situation to best determine whether a policy is needed, and if so, how large it should be.
For instance, a small life insurance policy may be sufficient to cover your end-of-life expenses, such as funeral costs while a large policy can provide for your spouse and children for years to come.
The average life expectancy in Minnesota is 80.9 years which means most people in this state live long lives. This is good news.
Unfortunately, whether due to a sudden serious illness or a fatal injury, lives are sometimes unexpectedly cut short. When you have a life insurance policy in place, you do not need to worry that your untimely death could cause your family undue financial hardship.
In fact, life insurance providers pay out about $4.4 billion a year to their policyholders’ designated recipients, referred to as “beneficiaries.”
How Much Does Life Insurance Cost in Minnesota?
The cost of life insurance can vary significantly from person to the next. Factors that can influence your costs include:
- Your age: Policies grow more expensive the older you are.
- Your personal health history: The healthier you are, the less your coverage will cost.
- Whether you use tobacco products: Smokers pay significantly higher rates for coverage than non-smokers.
- The amount of coverage you are purchasing: The more coverage you want, the more you will pay for your policy.
- The type of policy you are purchasing: Term life, whole life, and universal life insurance each have different costs and benefits.
Save on Life Insurance
Our independent agents shop around to find you the best coverage.
What Is Minnesota Term Life Insurance?
Term life insurance is designed to provide coverage only for a designated period of time, referred to as a term. You can purchase policies with terms that range anywhere from five to thirty years.
These policies are quite beneficial in certain situations. For instance, young couples may want to consider a 30-year term policy that can provide coverage during the years they need it most, such as while they are paying off their house and raising their children.
A single mother may want to purchase a term policy to ensure that her children will be provided for and will have the funds necessary for their education after high school if she were to suddenly pass away.
- Pros: This is the least expensive life insurance option. A term policy costs about 10% of what a whole life policy would cost. This enables you to buy a very large amount of coverage for a very affordable price.
- Cons: At the end of your policy’s term, you will no longer have coverage. At that time, it may be difficult to purchase another policy, particularly if you have developed health issues.
What Is Minnesota Whole Life Insurance?
Whole life insurance can provide coverage for your entire life, so long as you continue to pay your premiums. Although a whole life policy costs significantly more than a term policy, it offers an investment component as well as a tax-deferred status. Therefore, for some, it is worth the higher price.
Whole life policies are best when purchased while you are young. That way, you can lock in low rates and maximize your benefits.
- Pros: Your tax-deferred premiums build cash value. You can tap into this money through an interest-free loan at any time if your financial situation necessitates it. Also, if you want, you can cancel your policy and collect your cash earnings.
- Cons: This coverage comes with a much higher price tag than a term life policy. Also, if you fail to pay your premiums on time, the policy may be irrevocably terminated.
What Is Minnesota Universal Life Insurance?
Universal life insurance is similar to whole life, but it is more flexible. These policies allow you to make adjustments to your total coverage amount as well as use your accumulated cash value to pay your premium if you are unable to make your payment in any given month.
Also, because universal life policies pay a variable interest rate on your accumulated cash value, you have the potential to earn more interest on your investment than if you have a whole life policy.
- Pros: These policies are more flexible than whole life policies and do not expire like term life policies. They have a cash value that you can tap into at any time if needed and they have the potential to grow in value at a faster rate than whole life policies.
- Cons: Universal life policies cost much more than term life policies. If interest rates drop unexpectedly, these policies might not grow in value as quickly as whole policies.
How Do I Decide which Type of Policy to Purchase?
For many, the most difficult part of purchasing a life insurance policy is deciding which type of coverage to buy. Often, a financial adviser or estate planner can help you review your current financial situation and can make recommendations about which type is best for you.
There really are no right or wrong choices. What it comes ultimately comes down to is which type of policy you feel most comfortable with.
What if I Already Have Life Insurance through My Work?
If you are among the residents of Minnesota who are fortunate enough to have life insurance coverage through your work, you may think that buying another policy isn’t really necessary.
However, there are several ways that you can lose this employer-provided coverage, such as if you accept a new job with different company, if you get laid off following a corporate merger, or if you retire. When you leave your job, the life insurance coverage doesn’t go with you.
That is why it is often a good idea to have your own policy as well.
How Can an Independent Agent in Minnesota Help Me Find the Best Policy?
Local independent agents can help you find the right life insurance policy to meet your coverage and budgetary needs. These agents can work with a variety of insurance providers to get you selection of customized quotes. That way, you can choose the policy that offers the best value for your money.
It doesn’t cost anything to talk to an independent agent. Arrange an obligation-free consultation with one of the more than 500 independent insurance agents in Minnesota to get started.
©2023, Consumer Agent Portal, LLC. All rights reserved.