California Life Insurance

california life insurance text overlaying image of golden gate bridge Purchasing life insurance is one of the best ways to protect your family’s financial future. But if you are looking to purchase a life insurance policy in the state of California, there are a lot of things you’ll need to think about. There are multiple types of policies available at a wide variety of price points, and there are also regulations surrounding policies that you should know about. 

So, before purchasing a life insurance policy in the state of California, it is critical that you conduct as much research as possible to gain an understanding of the California life insurance market. Start by reading our guide below, and then contact an EZ agent, who will be able to answer all of your questions and find the right policy for you.

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How Life Insurance Works in California

Essentially, a life insurance policy is a contract between you and the insurance company that provides the policy. You promise to pay the required premiums to your insurer, and if you die during the policy’s term, your loved ones will receive a lump-sum death benefit from the insurance company. Your beneficiaries will be able to use the money for whatever they want or need, including paying off a mortgage, saving for retirement or college tuition, or replacing your salary – or they can simply enjoy having extra money in their pockets.

Those with debts, dependents, or other financial obligations that would continue even after death should seriously consider purchasing life insurance. If you are the sole breadwinner in your family, purchasing life insurance is especially critical to ensuring that your loved ones are financially provided for in the event of your death. 


Types of Life Insurance in California

There are a variety of types of life insurance policies available in California. Meaning you’re sure to be able to find one that meets your needs and preferences. With all the options out there, it can feel difficult to know where to begin, but the first thing you’ll need to think about is which of the two main types of life insurance policies is best for you: 

  • Term life insurance
  • Permanent life insurance

This decision will be heavily influenced by the specific needs you have. Especially whether you need insurance for the near or far future.


Term Life Insurance

Term life insurance is the most popular type of life insurance because the premiums tend to be very affordable. These policies are cheaper because they do not cover you for your entire life. Rather you will choose how long you want to be covered for when you purchase your policy. A policy’s term can be 15, 20, 25, or 30 years, with the average being closer to 15 years. A tax-free death benefit will be paid out to your beneficiaries if you pass away while the policy is active. One advantage of these plans, other than the price, is that your policy’s premiums are generally guaranteed to stay the same no matter how long it’s in effect. 

There are several types of term policies:

Level Term Life Insurance

With level term life insurance, your premium payments and your chosen death benefit amount will remain constant throughout the policy’s term. This is the most popular type of term life insurance policy.

Annual Renewable Term Life Insurance

This is a one-year term life insurance policy. You can renew your policy every year, but the cost rises as you get older.

Increasing Term Life Insurance

Your increasing term life insurance policy’s death benefit will increase in value at regular intervals. Your benefit amount might increase by 5% each year, for example. Unlike other types of term life insurance policies, the premiums for these policies may fluctuate over time.

Decreasing Term Life Insurance

With this type of policy, the death benefit is gradually reduced. While the premium remains constant for the duration of the policy. These plans are typically used to protect loans or mortgages. As the loan is repaid, the death benefit of your policy decreases.

Return-of-Premium Life Insurance

Return-of-premium (ROP) insurance is a type of term life insurance that allows you to receive a refund of your premium payments if you don’t die before the policy expires. ROP policies are significantly more expensive than other types of term life. But many people find the return of premiums feature appealing.


Permanent Life Insurance

Permanent life insurance is different from term life because, as the name implies, your permanent life insurance policy will remain in effect for your entire life. As long as you continue to pay your premiums on time. Because of this, and because permanent life insurance policies often have a cash value component, the premiums for these policies are typically higher than those of term policies. 

Like with term life, there are numerous types of permanent life insurance policies available:

Whole Life Insurance

Whole life insurance provides a guaranteed death benefit and can accumulate cash value. This cash value will accrue interest at a predetermined, tax-free rate.

Universal Life Insurance

Universal life insurance is one of the most flexible types of life insurance policies because you can actually change your premium payments and death benefit amount. UL premiums go toward both the cost of insurance (COI) and a savings component (also called the cash value). Once you have enough money in your cash value account, you can use that money to help pay your premiums. Additionally, if you want a lower premium, you can lower your death benefit amount to lower your premium payments.

Indexed Universal Life Insurance

With this type of permanent life insurance, the cash value that accrues with the policy can increase based on a stock index. Which is a predetermined grouping of various stocks. As the cash value of the policy increases, the premium for an indexed universal life insurance (IUL) policy can be adjusted in the same way that it is for a universal life policy. Your policy may even eventually become a zero-premium policy, with the cash value covering the entirety of your premium.

Variable Universal Life Insurance

The cash value of a variable universal life (VUL) policy, like the cash value of other permanent life insurance policies, can be invested. But you can invest your cash value in what are known as subaccounts. The subaccount structure is similar to that of a mutual fund. Meaning you can make or lose money depending on market fluctuations. The premium payments for IUL, like those of traditional universal life insurance, can be adjusted by using the cash value you accumulate. 

Final Expense Life Insurance

Final expense life insurance is a type of whole life insurance that pays a small benefit upon your death. Typically between $2,000 and $35,000. These policies can be a little bit more expensive than other policies with small death benefits. But you will not have to undergo a medical exam or wait for approval for your policy to go into effect. 

The death benefit from this type of policy is intended to cover final expenses such as a burial, cremation, or funeral service. But with that being said, your beneficiary will be free to spend the death benefit on whatever they want. Such as a vacation or property taxes.


California Life Insurance Laws

The sale of life insurance in the Golden State is governed by the California Insurance Code. Additional safeguards for California residents are offered by the state’s Insurance Commissioner’s office. Consumers in California are well protected by the state’s insurance laws and the regulations enforced by the California Department of Insurance. For example, you will have the following protections in California:

Free Look Period

In California, customers have ten days from the date of purchase to cancel their life insurance policy. If you decide to cancel your policy during this 10-day “free look period,” you will be able to request a refund for all premium payments made in those ten days.

Grace Period

If you miss a premium payment in California, the law gives you a 30-day grace period to make up for the missed payment before your insurer can cancel your policy. As long as you pay your premium within this 30-day period, you cannot have your policy canceled. 

Benefit Guarantee

The California Life & Health Insurance Guarantee Association will assist you in receiving compensation in the event that your insurer goes out of business. This association will compensate you for up to $100,000 in lost cash value and $250,000 in death benefits. Meaning the total amount of your policy might not be reimbursed. You need to be up-to-date on all of your life insurance payments in order to collect this money. And your life insurance company needs to have had the appropriate licenses.

Contestability Limit

The contestability period refers to the amount of time an insurer has to contest any claims that might be fraudulent or look into your application for any misrepresentations. Once this time period has passed, the policy is typically regarded as being incontestable. And your insurance company will have to honor any claims, except in the case of nonpayment of premiums.

Settlement Timelines

Life insurance companies in the state of California are required to pay all claims within 30 days of receiving evidence of a death. If the payment is delayed for any reason, the beneficiary will be entitled to interest. The insurer will also be subject to penalties.


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The Cost

Your age, your overall health, and even your gender can all have a significant impact on the cost of your premiums. Contacting one of our EZ agents is the best way to find out how much you might end up paying for a policy. They can use the information you provide to find you free quotes that are customized to meet your specific needs. But to give you an example of prices, a 35-year-old healthy man who doesn’t smoke could pay between $21 and $62 a month for a 20-year $1,130,000 policy in California.


California Life Insurance Resources

In California, there are several state and federal resources in place to help you if you have any problems with your insurer or policy. These resources include:

  • California Department of Insurance – If you are looking for information regarding life insurance in the state of California, your first point of contact should be the Department of Insurance. A Life Insurance Guide can be found on their website for consumers who are considering purchasing life insurance.
  • California Life & Health Insurance Guarantee Association – In the event that an insurance provider goes bankrupt, the California Life & Health Insurance Guarantee Association is committed to providing assistance to policyholders. It explains what to do in the event that your insurer goes out of business. And how to determine whether or not your policy is covered by California’s life insurance guarantee.



  • Does California require life insurance?

No, you don’t have to have life insurance no matter where you live. 

  • What are the best life insurance companies in California?

There are a lot of good options for life insurance in California. At the top of the list are Transamerica, Prudential, AAA, State Farm, and Nationwide.

  • How much does life insurance cost in California?

There are many things that can change how much life insurance costs, but here’s an example. A 30-year-old woman in good health who lives in California and buys a 20-year term policy for $1,130,000 will pay an average of $37.73 per month. On the other hand, a healthy 30-year-old man will pay about $35.26 for the same policy.

EZ Can Help!

Everyone has unique requirements, priorities, and financial constraints. We at EZ understand that you want the best financial security for yourself and your family without depleting your savings account. We make every effort to simplify the process of purchasing life insurance for you. And not only that, but each one of our services is completely free. You will not be charged any additional fees for assistance with anything. From answering basic questions to navigating policy selection to the enrollment process and beyond. Simply enter your zip code in the space below or call us at 877-670-3560 to get started.

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About The Author:
Cassandra Love

With over a decade of helpful content experience Cassandra has dedicated her career to making sure people have access to relevant, easy to understand, and valuable information. After realizing a huge knowledge gap Cassandra spent years researching and working with health insurance companies to create accessible guides and articles to walk anyone through every aspect of the insurance process.