The cost of life insurance can vary based on factors like age, health, lifestyle, and the type of coverage you choose. The good news is that it’s more affordable than you think.
With term life insurance, you can find affordable options that provide the protection you need without straining your budget. Whole life insurance, while slightly higher in cost, offers lifelong coverage and builds cash value over time.
No matter your budget, there’s a life insurance plan that can work for you.
Can my premiums increase over time?
If you have a policy with level premiums, like most plans, your payments stay the same for the entire policy length.
However, some policies, such as yearly renewable term or certain types of flexible coverage, may have premiums that increase over time.
Will my premiums go up as I get older?
If you already have a policy with a fixed rate, your premiums will not increase as you age. They stay the same for the entire length of the policy.
But if you wait to buy life insurance, it will likely cost more. The older you are when you apply, the higher your rate is because age and health affect the price.
How do I know if I’m getting the best deal?
Compare quotes from multiple top-rated insurers, not just one. Look at the monthly cost, coverage amount, and policy features. Make sure the company is known for good service and paying claims on time.
Ozzo brings all of this together in one place, so you can compare your best options side by side and choose the right coverage without needing to be an insurance expert or spending hours on research.
Can I get life insurance if I have a low credit score?
Your credit score doesn’t directly affect your ability to get life insurance. Insurers focus more on your age, health, and income. Many people with low credit still qualify for good coverage.
How are my life insurance premiums calculated?
Various factors influence your life insurance premium:
Age: The younger you are, the lower your premium will likely be, as you’re generally seen as less risky to insure.
Health: Insurers will examine your current health, pre-existing conditions, and medical history. The healthier you are, the more affordable your premium may be.
Lifestyle: Smoking, drinking, and overall lifestyle choices can impact your premium, as these factors may increase your risk.
Coverage Amount: The more coverage you need, the higher your premium will be. It’s about finding the optimal amount of protection that fits your budget.
Policy Type: Different types of policies, like term or whole life, may have different premium structures. Whole-life policies tend to cost more.
Do life insurance benefits get taxed?
Life insurance benefits are paid out as a lump sum and are generally tax-free for your beneficiaries. They can use the money without having to report it as income. However, there are a few exceptions. If the benefit earns interest before it’s paid out, that interest may be taxed. Also, if the policy is part of a large estate, estate taxes could apply depending on the total value.
For most people, though, the full benefit goes to their loved ones tax-free.
How are death benefits paid?
Death benefits are generally paid directly to the beneficiary in a lump sum. This is the most common and simplest method, allowing your loved ones to receive immediate financial support. However, some policies offer additional options for payment, such as:
Installments – Instead of a lump sum, the death benefit can be paid in regular installments over time, providing ongoing financial support.
Combination—Certain policies offer a lump sum and installments, which might help manage long-term financial needs.
Receiving the death benefit typically involves your beneficiary submitting a claim along with a death certificate and any other required documentation. The insurance company will then review the claim and send the funds to your loved ones. The timeline can vary depending on the insurer, but most companies aim to process claims quickly and efficiently.
How does life insurance work with my will?
Life insurance and your will serve different purposes, and they work alongside each other. Life insurance pays the death benefit directly to the beneficiary you name on the policy. It does not
go through your will or the probate process, so the money is usually paid out quickly and without delays.
Your will covers everything else, such as personal property, guardianship of children, and other instructions for your estate. It's essential to keep your life insurance beneficiary designations up to date because those take priority over anything written in your will.
