If you want to protect your family’s financial future, you should seriously consider purchasing life insurance. But we get that this can be an overwhelming task. Buying life insurance in the state of Indiana calls for careful attention to a variety of factors. In Indiana, there are multiple types of policies to choose from, as well as a wide range of regulations to be aware of.
You’ll need to research the life insurance market in Indiana as thoroughly as possible before making any final decisions. But don’t stress: EZ is here to make sure you make the most well-informed decision possible. We’ve laid out a comprehensive guide to buying life insurance in Indiana below. Once you’ve read it, contact an EZ agent to find the best policy for you.
How Life Insurance Works in Indiana
A life insurance policy is a binding agreement between you and your insurance provider. You agree to pay the required premiums to the insurance company. In exchange, your chosen beneficiaries will be given a predetermined lump-sum death benefit if you die while the policy is still in effect. Your beneficiaries will be able to use the money for whatever they choose. Including repaying a mortgage, paying down other debts, saving for retirement or college, or simply for replacing your income.
If you have financial responsibilities that will still be in place after your death, such as a mortgage or student loans, you should seriously consider purchasing life insurance. And if you are the sole or primary breadwinner for your family, life insurance is a necessity. Having a policy means your loved ones will be able to continue living comfortably after your passing.
Types of Life Insurance Available in Indiana
There are so many options when it comes to life insurance policies that you should have no problem finding one that’s right for you. You will have to make a lot of decisions, though. The first of which will be the choice between the two main types of life insurance:
- Term life insurance
- Permanent life insurance
When deciding between term and permanent life insurance, it’s crucial to consider how far in the future you anticipate needing the policy’s protection, as well as how much you are willing to pay in premiums.
Because of its more affordable premiums, term life insurance is very popular. It tends to be more affordable than permanent life because your term life policy will not cover you indefinitely. When you buy term life insurance, you choose the length of time that you will be covered for. Typically, a policy will have a term length of 15, 20, 25, or 30 years. Your premiums will remain the same (in most cases) for your entire term. If you pass away during your term, your beneficiaries will receive the entirety of the tax-free death benefit.
There are several types of term life policies available, including:
Level Term Life Insurance
With term life insurance, both the death benefit and the premiums are set when you purchase the policy, and will not change over the course of the policy’s term. The majority of individuals who purchase term life select level term life insurance policies.
Annual Renewable Term Life Insurance
Annual renewable life insurance is a one-year term life insurance policy. You will be able to renew your policy on an annual basis. However, your premiums will rise with each passing year.
Increasing Term Life Insurance
An increasing term life insurance policy will provide its beneficiary with an ever-increasing death benefit over the course of the policy’s coverage period. For instance, the death benefit associated with the policy might go up by 5% each year. Unlike with other term life policies, premiums for increasing term insurance will increase or decrease during your policy’s term.
Decreasing Term Life Insurance
With decreasing term life insurance, the death benefit amount will gradually decrease, while the premiums will remain the same. These policies are often purchased for coverage while paying down a loan or mortgage. The death benefit will decline in value as the loan is paid back.
Return-of-Premium Life Insurance
Return-of-premium (ROP) insurance is a form of term life insurance that allows you to recoup your premium payments if you don’t pass away prior to the expiration of the policy. The prospect of having your premiums returned to you can be appealing. But be aware that the cost of ROP policies is significantly higher than that of other term life policies.
Permanent Life Insurance
Unlike with term life insurance, a permanent life insurance policy will remain in effect for the rest of your life. The premiums are usually higher for permanent life for this reason, and because permanent life policies usually include a type of savings account known as cash value. This cash value accumulates interest, and can be borrowed against. You can even use it to pay your premiums, so there are benefits to permanent life that outweigh the extra costs for some people.
There are numerous types of permanent life insurance policies to choose from, including:
Whole life insurance not only provides a benefit to beneficiaries upon death, but it also includes a savings component. So, when you pay your premiums, you will accumulate a cash value that will accrue tax-deferred interest at a predetermined rate.
This type of policy is extremely flexible, since you will be able to modify not only the amount of the death benefit, but also the amount of your premium payments at any time. This type of policy also includes a cash value, which you will eventually be able to use to pay your premiums, thus lowering them. You can also lower your premiums by decreasing your death benefit amount, if you so choose.
Indexed Universal Life Insurance
Indexed universal life (IUL) insurance is another type of permanent life insurance that includes a cash value, but its cash value can be invested in a predetermined grouping of different stocks, so you might be able to earn more than with a set interest rate. In addition, the premiums for an IUL are adjustable in the same way that universal life policy premiums are: they rise and fall in tandem with the policy’s cash value. You might not have to pay a premium one day because the cash value will cover it all.
Variable Universal Life Insurance
It is possible to make investments with the cash value of a variable universal life (VUL) policy, just like with the cash value of other types of permanent life insurance policies. And, adjustments can be made to the premium, just like they can be with conventional universal life insurance. But with VUL, the cash value can be invested in subaccounts that are similar to mutual funds.
Final expense life insurance is a type of whole life insurance policy that pays a relatively modest death benefit, usually $2,000 to $35,000. This death benefit is intended to pay for final expenses such as a burial, cremation, or funeral services, but your beneficiary will have complete discretion over how the money from the death benefit is spent. For example, the money could be used to pay the beneficiary’s taxes or to go on a vacation.
This type of policy can be a good option if you’re older or in poor health, since you will not need to undergo a medical exam to receive coverage quickly. But be aware that final expense policies can be more expensive than comparable policies, and they do not pay out as much as other policies do.
Indiana Life Insurance Laws
When it comes to life insurance policies, the federal government has, for the most part, delegated the responsibility of regulating the insurance industry and protecting consumers to the states. So, there are laws in place in the state of Indiana that will protect you as a life insurance policyholder.
Title 27 of the Indiana Code is the primary regulatory force behind the insurance industry within the state of Indiana, but other legal provisions have also been adopted as consumer protection laws. The Indiana Department of Insurance is in charge of exercising regulatory authority over the state’s insurance industry.
So, because the state regulates the life insurance industry, you will have the following rights and protections:
Free Look Period
The majority of states in the country require that life insurance companies give their customers the opportunity to cancel their life insurance policy within a short period of time after they have signed up for it. This short period of time (usually around 10 days) is known as a free look period. But there is no statute in the state of Indiana that mandates life insurance providers allow you a free look period. With that being said, though, the vast majority of insurers in Indiana will allow you to “try out” your policy for a limited amount of time, typically between one and two weeks.
Indiana law mandates a grace period of 30 days for life insurance policies. This means that if you miss a premium payment, you will have 30 days to make up the payment. During which your policy cannot be canceled, and your life insurance company will be required to pay the death benefit if you pass away. This grace period preserves your current policy without requiring you to apply for and be underwritten for a new one. It also guarantees that your beneficiaries will get their payout, even if you are late on a payment.
If your life insurance provider fails, the state of Indiana will step in to cover any outstanding claims. Your life insurance policy in Indiana is protected up to $300,000 in death benefits or $100,000 in cash value by the Indiana Life & Health Insurance Guaranty Association.
Insurance companies in the state of Indiana have two months from the time they receive a claim to give your beneficiaries their payout. The death benefit will begin to accrue interest after that time, and your insurance company will be fined.
There are a number of variables that can impact the cost of your premiums, including your age, current health, and even your gender. Get in touch with one of our EZ agents to get quick and accurate free quotes personalized to you. But to give you an example of what life insurance premiums look like, a 30-year-old man in good health who does not smoke could pay anywhere from $15 to $61 per month for a 20-year $597,000 policy in Indiana.
Indiana Life Insurance Resources
In Indiana, 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:
- Indiana Life and Health Guaranty Association – The Indiana State Legislature established this nonprofit private corporation to protect Indiana residents if their insurance company faces financial problems. Consumers can check an insurer’s licensing status and whether or not their policy qualifies for protection by consulting the ILHGA.
Does Indiana require life insurance?
No, you will never be forced to get life insurance. It is always your choice.
What are the best life insurance companies in Indiana?
There are a lot of good ways to get life insurance in Indiana. At the top of the list are Gerber Life Insurance, Prudential, MassMutual, Nationwide, and State Farm.
How much does life insurance cost in Indiana?
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 in Indiana who buys a $597,000 20-year term policy will pay an average of $24.07. On the other hand, a healthy 30-year-old man will pay about $30.97 for the same policy.
EZ Can Help!
At EZ, we get that everyone has unique requirements, priorities, and financial constraints. We also understand that you want the best financial security for yourself and your family without depleting your savings account. So, we make every effort to simplify the process of purchasing life insurance – for free! You will not be charged any additional fees for assistance with anything. That includes answering basic questions to navigating policy selection to the enrollment process and beyond. Simply enter your zip code in the space provided below or call us at 877-670-3560 to get started.