Purchasing a life insurance policy is one of the best things you can do to protect your family’s financial future and give yourself peace of mind. But finding the right policy for you can be tough, since there are so many factors to consider. Including the many types of policies available in Mississippi, and the rules and regulations surrounding them. You need to research as you can before purchasing a policy in Mississippi to gain an understanding of the Mississippi life insurance market – and EZ can help! First, read our comprehensive guide below. Then speak to an agent about finding the perfect policy for you.
How Life Insurance Works in Mississippi
A life insurance policy, at its core, is a contract between you and your chosen insurance company. You agree to pay your premiums on time, and if you die while the policy is still in effect, your insurance company will be obligated to pay a one-time, lump-sum death benefit to your chosen beneficiaries. They will be able to use the money however they choose. From repaying a mortgage to saving for retirement to simply replacing your income. In the end, having a policy will give you peace of mind knowing your family will be taken care of when you are gone. But it’s important that you find the right policy for you.
Types of Life Insurance Available in Mississippi
Because there are so many options when it comes to life insurance policies, almost anyone can find one that works for them. But because there are so many options, you’ll need to make a lot of decisions, the first of which will be between the two main types of life insurance: term life insurance and permanent life insurance.
When deciding between term and permanent life insurance, one of the most important factors to consider is how long you want the policy’s coverage. For example, do you only want to pay for a policy while you are repaying your mortgage? You will also need to think about how much you are willing to spend on premiums. As well as what extra features you might want from your policy.
Term life insurance tends to have lower premiums than permanent life insurance, which is probably why term life is the more popular choice. This type of policy is cheaper because it will not cover you indefinitely. Instead, when you buy term life insurance, you choose the length of coverage, or your policy’s “term”. A term life insurance policy’s typical term is 15, 20, 25, or 30 years.
Another reason that term life policies are popular is that they are fairly straightforward. For example, your monthly premiums will stay the same for your entire term with most term life policies. And, as long as your policy is still in effect when you pass, your beneficiaries will receive a lump-sum, 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 whole term of the policy. This simple, basic policy is the most popular type of term life insurance.
Annual Renewable Term Life Insurance
Annual renewable life insurance is a one-year term life insurance policy. You can renew your policy on an annual basis, but your premiums will most likely increase each year.
Increasing Term Life Insurance
The death benefit of an increasing term life insurance policy grows over the term of the policy. For example, your policy’s death benefit could rise by 5% each year. Unlike with other types of term life, premiums for increasing term insurance can vary throughout the policy’s term.
Decreasing Term Life Insurance
The premiums of decreasing term life policies will stay the same for the whole term. But the death benefit decreases gradually over the course of the policy. These policies are commonly purchased for coverage while repaying a mortgage or loan. As the loan is repaid, the amount of the death benefit decreases.
With Return-of-premium (ROP) term life insurance, your premium payments will be refunded if you don’t die before the policy’s expiration date. While many people find the return of premiums feature appealing, it’s important to note that the cost of ROP policies is significantly higher than that of other types of term life policies.
Permanent Life Insurance
Permanent life insurance differs in a few significant ways from term life. First, as long as you pay your premiums on time, your permanent life insurance policy will remain in effect for the rest of your life. Next, permanent life policies usually include a type of savings account known as cash value. Which accrues interest and can be used for borrowing against or even paying your premiums. Finally, because of these features, premiums are usually higher for permanent life policies than they are for term life policies.
There are numerous types of permanent life insurance policies to choose from, including:
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, in addition to providing a death benefit.
This type of permanent life includes a lot of options and is very flexible. For example, you can change the amount of the death benefit at any time; if you choose to lower it, you will pay less in premiums. You will also be given a cash value account, and once you have accumulated enough cash value, you will be able to lower your premiums by using your cash value to pay them.
Indexed Universal Life Insurance
Indexed universal life insurance, or IUL, is another type of permanent life insurance that includes a cash value, but with this type of policy, your cash value accrues interest based on investment in a stock index. This means you have an opportunity to make a bit more money than with a fixed interest rate. IUL premiums, like universal life policy premiums, can increase or decrease in proportion to the policy’s cash value. Eventually, the cash value might be sufficient to cover everything, and you won’t have to pay your premiums.
Variable Universal Life Insurance
Like the cash value of other types of permanent life insurance policies, the cash value of a variable universal life (VUL) policy can be used to make investments. But a variable universal life insurance policy’s cash value can be invested using the policy’s investment subaccounts, which are similar to mutual funds. And premium changes are possible, just like with traditional universal life insurance.
A final expense insurance policy is a type of whole life policy that pays out a small benefit intended to cover final expenses, such as a burial, cremation, or funeral services. Typically, death benefits for this type of policy range from $2,000 to $35,000. And while the death benefit is meant to cover final expenses, 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 to take a vacation, for example.
This type of policy might be right for you if you need extra coverage. Or if you need immediate coverage and worry that you might not be able to pass a medical exam for traditional life insurance. You should be aware, though, that these policies only pay out a small amount and can be more expensive than comparable policies.
Mississippi Life Insurance Laws
When it comes to life insurance, the federal government generally leaves consumer protection and insurance industry regulation up to the individual states. So, in the state of Mississippi, policies and insurers are regulated by state legislation. Title 83 of the Mississippi Code serves as the backbone of insurance regulation. However, other provisions have been enacted to better safeguard policyholders and drivers. The insurance industry in Mississippi is regulated by the Mississippi Insurance Department.
All of this means that you will have the following rights and protections when you purchase a life insurance policy in Mississippi:
Free Look Period
A free look period is a short period of time (usually a week or two) after you purchase your policy during which you can change your mind, cancel your policy, and get a full refund. Unfortunately for Mississippians, there are no state-mandated free look periods in Mississippi. Although there is no legal requirement for a free-look period in Mississippi, most life insurance providers provide policyholders with one. The free look period is usually between one and two weeks.
Like the rest of the country, Mississippi gives policyholders a 30-day grace period to make up a late payment. Your policy cannot be canceled during this time. If you make your overdue payment within the grace period, coverage will be restored. And, if you pass away during your grace period, your insurance company will still be required to pay out the death benefit. There is no limit to the number of grace periods you will be granted.
The Mississippi Life Guaranty Association will stand behind your policy if your insurer goes bankrupt in the Magnolia State. This organization will reimburse you for your cash value and honor your death benefit even if your insurance company fails. In order to be covered, you need to be current on your premium payments. Your insurance provider also needs to have been authorized to do business in Mississippi.
Factors such as your age, health, and even gender can all affect the cost of your premium. Contact one of our EZ agents for the quickest and most accurate quotes on policies that will work for you. But to give you an idea of what life insurance premium prices look like, a healthy 30-year-old man who does not smoke could pay anywhere from $14 to $55 per month for a $519,000 policy with a 20-year term in Mississippi.
Mississippi Life Insurance Resources
In Mississippi, there are several resources in place to help you if you have any problems with your insurer or policy. These resources include:
- NAIC life insurance policy locator service – If beneficiaries of a policy can’t track down the policy details after the policyholder’s passing, they can use the NAIC’s policy locator service to conduct a search. If the policy details are held by a participating firm, they will be forwarded on to the beneficiary or designated contact person.
- Mississippi Life & Health Insurance Guaranty Association – Any company offering life insurance or annuities in Mississippi must be a member of the Mississippi Life & Health Insurance Guaranty Association. The policyholders of a guaranty association member company will be safeguarded in case a member insurance company goes bankrupt.
Does Mississippi 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 Mississippi?
In Mississippi, there are many good ways to get life insurance. Pacific Life, Progressive, Lincoln National, Prudential, and MassMutual are at the top of the list.
How much does life insurance cost in Mississippi?
There are many things that can change how much life insurance costs, but here’s an example. A healthy 30-year-old woman in Mississippi will pay an average of $19.52 per month for a 20-year term policy that costs $519,000 and lasts for 20 years. On the other hand, a healthy 30-year-old man will pay about $26.47 for the same policy.
EZ Can Help!
At EZ, we get that everyone has unique requirements, priorities, and financial constraints. And we know you want the best for your family without depleting your savings account. We also know that finding the right life insurance policy can be a hassle, so we make every effort to simplify the process of purchasing life insurance. Not only that, but every 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 provided below or call us at 877-670-3560 to get started.