Kentucky Life Insurance

kentucky life insurance text overlaying image of louisville If you’re looking to financially protect your family in the future, you need a life insurance policy. But we know that finding one can feel like a daunting task, since there are a number of things to think about before purchasing a life insurance policy in Kentucky. You’ll need to look into the many various types of policies available. As well as familiarize yourself with the regulations that apply to policyholders and insurance companies based in Kentucky. Before making a purchase, it is in your best interest to become as knowledgeable as possible about the life insurance market in Kentucky. But EZ is here to help! First, read our comprehensive guide below, then contact an EZ agent to find the perfect policy for you.

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How Life Insurance Works in Kentucky

A life insurance policy is a contract between you and your chosen insurance company. You agree to pay the premiums for the policy. And if you die while your policy is in effect, your loved ones will receive a lump-sum death benefit from the insurance company. Your chosen beneficiaries will be able to use this payout however they choose. From paying off a mortgage or other debts to saving for retirement or college to simply replacing your income.


Types of Kentucky Life Insurance

There is such a wide range of insurers providers and types of policies to choose from that almost anyone can find a life insurance policy that is suitable for them. When making your choice, the first decision you’ll have to make is between the two main types of life insurance:

  • Term life insurance
  • Permanent life insurance

One of the most important factors to consider when deciding between term and permanent life insurance is how long you’ll want the policy’s coverage for. You’ll also need to think about how much you’re willing to spend on premiums. And what you expect out of your policy.


Term Life Insurance

Term life insurance is the more popular of the two main types of life insurance. This is because it is generally cheaper than permanent life insurance. This is because term life policies do not cover you indefinitely. Instead, when you purchase term insurance, you will select the length of time (or “term”) that the policy will cover you. This time frame is typically 15, 20, 25, or 30 years. These policies are fairly straightforward. In most cases, with term life, your premiums are guaranteed to remain the same for the entirety of your term. If you die while the policy is still in effect, your beneficiaries will receive a tax-free death benefit. 

There are several types of term life policies available, including:

Level Term Life Insurance

The death benefit and premiums for level term life insurance are fixed for the policy’s entire term. The vast majority of people who choose term life purchase level term life insurance.

Annual Renewable Term Life Insurance

Annual renewable term life insurance is a one-year term life insurance policy. You will be able to renew your policy on an annual basis. However, your premium will rise with each passing year.

Increasing Term Life Insurance

With increasing term life, the death benefit associated with your policy will gradually increase throughout the policy’s term. For example, your death benefit might increase by 5% each year. Unlike with other types of term life, there is a chance that the premiums for increasing term insurance will increase or decrease over the course of the policy’s term.

Decreasing Term Life Insurance

On the other hand, with decreasing term life, the death benefit will gradually decrease over the policy’s term, while the premium will remain the same. These policies are typically purchased for coverage during the repayment of a mortgage or loan. And as the loan is paid back, the amount of the death benefit will decrease. 

Return-of-Premium Life Insurance

Return-of-premium (ROP) insurance returns your premiums to you if you don’t die before the end of the policy’s term. Many people find the return of premiums feature appealing. However, it’s important to note that the cost of ROP policies is significantly higher than that of other term life policies.


Permanent Life Insurance

Term life and permanent life insurance differ in a few ways. First of all, a permanent life insurance policy will remain in effect for the rest of your life. As long as you continue to pay your premiums on time. Next, permanent life insurance usually includes a type of savings account, known as cash value. Which you can borrow against or even use to help pay your premiums. And finally, because of these features, premiums are typically higher for permanent life policies than those of term policies. 

There are numerous types of permanent life insurance policies available, including:

Whole Life Insurance

Whole life insurance includes a guaranteed death benefit and set premiums. A whole life insurance policy can accumulate cash value that accrues interest at a predetermined, tax-free rate.

Universal Life Insurance

With universal life (UL), both the death benefit and your premium payments can be adjusted at any time. You can lower your premium payments by either decreasing the amount of your death benefit. Or by using the cash value that you accumulate to make premium payments, thus lowering what you need to pay out-of-pocket.

Indexed Universal Life Insurance

With indexed universal life, or IUL, insurance, your cash value can accrue interest through investment in a stock index. Which is a predetermined grouping of various stocks. IUL’s premiums are adjustable in the same way that universal life policy’s premiums are. They can increase or decrease in proportion to the cash value of the policy. Eventually, your cash value might be able to cover everything, at which point you won’t have to pay your premiums anymore.

Variable Universal Life Insurance

In the same way that the cash value of other types of universal life insurance policies can be used to make investments, the cash value of a variable universal life (VUL) policy can also be used in this manner. With VUL, though, you can invest the cash value in subaccounts that are similar to mutual funds. You can also change your premiums, just like you can with traditional universal life insurance. 

Final Expense Life Insurance

A final expense life insurance policy is a type of whole life insurance that pays out a relatively small benefit, typically from $2,000 to $35,000. The death benefit from final expense insurance is intended to pay for final expenses such as a burial, cremation, or funeral services, but your beneficiary will have complete control over how the death benefit funds are spent. The funds could be used to pay the beneficiary’s taxes or for a vacation, for example.

These policies have pros and cons. As pointed out above, they pay out a relatively small death benefit, and can be expensive when compared with other similar policies. On the other hand, these policies are easy to get, because they do not require a medical exam, and generally go into effect immediately. That means a final expense policy might be a good option for you if you are older or not in the best health.


Kentucky Life Insurance Laws

When it comes to life insurance policies, the federal government has, for the most part, delegated the responsibility of regulating insurance companies and protecting consumers to the states. That means life insurance laws have been enacted in the Commonwealth of Kentucky to better safeguard policyholders. The Insurance Code in Chapter 304 of the Kentucky Revised Statutes is the primary regulatory force behind the insurance industry within the commonwealth of Kentucky, but there are other legal provisions that have been adopted as consumer protection laws. The regulation of the life insurance industry in the state of Kentucky is the responsibility of the Kentucky Department of Insurance.

If you purchase life insurance in Kentucky, you will have the following rights:

Free Look Period

In most states, insurance companies are required to give you a free look period, during which you can “test drive” your insurance policy and cancel without a penalty if you change your mind. In Kentucky, the free look period lasts for a standard length of ten days, but if you are purchasing a replacement policy, the period is extended to twenty days. If you decide to cancel your policy during the free look period, you will receive a full refund without being subject to any penalties or additional fees.

Grace Period

In the state of Kentucky, insurance companies are also required to allow you a grace period if you miss a premium payment. This grace period lasts for a full month, and as long as you make up your missed payment within that month, your insurance company will not be allowed to cancel your policy, and will have to pay out your beneficiary’s claim if you pass away during your grace period. In addition, there is no cap on the number of grace periods that you will be allowed.

Benefit Guarantee

In the event that your life insurance provider declares bankruptcy or becomes unable to meet its financial obligations, you will be protected by the Kentucky Life and Health Insurance Guaranty Association. This organization guarantees payments to beneficiaries of up to $300,000, and also guarantees cash value of up to $100,000 per owner. These limits apply regardless of the number of policies you own or the size of each of those policies. 


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The Cost

Your age, your overall health, and even your gender can all have an effect on the cost of your premiums, so it’s important to consider all of the factors that could apply to you. Getting in touch with one of our EZ agents is the easiest way to get free personalized quotes. But to give you an example of prices, a 31-year-old man in good health who does not smoke could pay anywhere from $15 to $58 per month for a 20-year $566,000 policy in Kentucky. 


Kentucky Life Insurance Resources

In Kentucky there are several resources in place to help you if you have any problems with your insurer or policy. These resources include:

  • Kentucky Department of Insurance – The Kentucky Department of Insurance offers a variety of services to consumers, including the following:
    • A compilation of insurance statutes and regulations
    • An online form for filing complaints 
    • Help with reporting fraudulent activity
    • Tools to look up insurance companies and check their licenses
  • Insurance Institute of Kentucky – The nonprofit Insurance Institute of Kentucky supports and educates policyholders and other interested consumers in the state. The institute provides both an overview of life insurance and annuities as well as links to additional resources, such as services that can help locate lost policies.
  • Kentucky Life & Health Insurance Guaranty Association – Insurance companies that are licensed to do business in Kentucky are required by law to be members of the Kentucky Life & Health Insurance Guaranty Association. Policyholders will be protected by the coverage provided by the guaranty association in the event that a member company goes out of business.



  • Does Kentucky 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 Kentucky?

In Kentucky, there are many good ways to get life insurance. Northwestern Mutual, Transamerica, State Farm, Lincoln Financial, and New York Life are at the top of the list.

  • How much does life insurance cost in Kentucky?

There are many things that can affect how much life insurance costs, but here’s an example. A healthy 31-year-old woman in Kentucky will pay an average of $24.75 per month for a 20-year term policy that costs $566,000. A healthy 31-year-old man, on the other hand, will pay about $30.43 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 for your family without depleting your savings account. So, we’re with you every step of the way. Simplifying the process of purchasing life insurance and offering all of our services for 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 provided below or call us at 877-670-3560 to get started.

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  • Let us help you choose the right Life Insurance Plan for you & your family.

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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.