Are you a Missouri resident who’s looking to invest in a life insurance policy to protect your family’s future? Purchasing life insurance is a wise decision, but choosing the right policy for you can be tough. There are a number of factors to consider and a lot to learn about. Including the types of policies available and the many regulations surrounding policies and insurers in Missouri.
Before purchasing a policy in Missouri, you should learn as much as possible about Missouri’s life insurance market. That might sound like a big task, but don’t stress: EZ is here to help! First, read our comprehensive guide below, then speak to an EZ agent to find the perfect policy for you.
How Life Insurance Works in Missouri
Simply put, a life insurance policy is a contract between you and an insurance provider. You agree to pay your premiums on time. If you pass away while the policy is active, a one-time, lump-sum death benefit will be paid out to your chosen beneficiary(s). Your beneficiaries will be able to use the money for whatever they choose. Including mortgage payments, debt reduction, college or retirement savings, or simple income replacement. The right policy will ensure that they will be able to continue to live comfortably even after you are gone.
Types of Life Insurance Available in Missouri
Now more than ever, it is possible to find a life insurance policy that meets your unique requirements. This is because there are so many types on the market. But because there are so many types of policies available, you’ll need to have an understanding of the differences between them, and the features each offers.
The first decision you’ll have to make will be between the two main types of life insurance: term life insurance and permanent life insurance. One of the most important considerations when choosing between term and permanent life insurance is how long you want your policy to cover you for. For example, you might just want a policy to cover you while you repay a loan. Or you may want it to cover you while your children are young or in college. You’ll also have to think about how much you are willing to spend, and what features you would like your policy to include.
Term life insurance has grown in popularity due to its affordable premiums. These types of policies tend to be cheaper than permanent life policies because they do not cover you indefinitely. Instead, the length of your policy’s term is up to you. With a typical term being between 15 and 30 years.
These policies are also fairly straightforward. For example, your premiums will remain the same for your entire term, in most cases. And if you pass away while the policy is active, your beneficiaries will receive a lump-sum, tax-free death benefit .
There are several types of term life insurance policies available, including:
Level Term Life Insurance
The death benefit and premiums for level term life insurance are fixed for the duration of the policy. This is the most popular type of 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, but the price of your premiums will most likely rise each year.
Increasing Term Life Insurance
The death benefit of an increasing term life insurance policy grows over the term of the policy. Your death benefit could increase by 5% each year, for example. Unlike with other types of term life, premiums for increasing term insurance can vary throughout the policy’s term.
Decreasing Term Life Insurance
Conversely, the death benefit for a decreasing term life insurance policy gradually decreases over the policy’s term. But the premium does not change. These policies are typically purchased for coverage while repaying a mortgage or other loan. The amount of the death benefit will decrease as the loan is repaid.
Return-of-Premium Life Insurance
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 from term life in a few significant ways. First, a permanent life policy will cover you for your entire life. As long as you continue to pay your premiums on time. Next, these policies usually include a type of savings account, known as cash value. The cash value accrues interest and can be used to borrow against and even to pay your premiums. Finally, because of these features, permanent life policy premiums are usually higher than those of term life policies.
But like term life policies, there are numerous types of permanent life policies to choose from, including:
Whole life insurance provides a guaranteed death benefit as well as fixed premiums. In addition to providing a death benefit, a whole life insurance policy can accumulate cash value that earns interest at a predetermined, tax-free rate.
This type of permanent life policy gives you a lot of options and flexibility. For example, if you want to change the amount you’re paying in premiums, you can. You can either do so by lowering the amount of your death benefit, or by using the cash value that you’ve accumulated.
Indexed Universal Life Insurance
Indexed universal life insurance, or IUL, is another type of permanent life insurance that includes a cash value. But with IUL, the interest rate your cash value earns is based on investment in a stock index, which is a predetermined grouping of various stocks. And, the premiums of IUL policies, like the premiums of universal life policies, 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 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 it can be invested using the policy’s subaccounts, which are similar to mutual funds. Premium changes are possible, just like with traditional universal life insurance.
Final expense life insurance is a type of whole life insurance that pays out a small death benefit, typically between $2,000 and $35,000. This death benefit is intended to provide financial support for final arrangements, such as a burial, cremation, or funeral service. But, with that being said, the recipient of the death benefit can do whatever they want with the money. Your beneficiary can use the money for whatever purpose they see fit, such as paying their taxes or taking a vacation.
This type of policy might be a good option for you if you need immediate coverage and/or are worried that you might not be able to qualify for a traditional life insurance policy. These policies don’t require a medical exam, and because of this, they tend to be a bit more expensive than other comparable policies.
Missouri 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. That means life insurance policyholders are protected by state law in Missouri. The insurance industry in Missouri is primarily governed by Title 20 of the Missouri Code of State Regulations and Chapter 376 of the Missouri Revised Statutes, but other legal provisions have been adopted as consumer protection laws. The insurance industry in Missouri is regulated by the Missouri Department of Insurance.
So, in Missouri, you will have the following rights when you purchase life insurance:
Free Look Period
In many states, life insurance companies are required to give new policyholders a free look period, meaning they have a short period of time (usually a week or two) to cancel their new policy without penalty and to receive a full refund. In Missouri, though, insurance companies are not required by the state to give a free-look period to customers. But, with that being said, most insurance providers give customers a free look period regardless of any legal requirement to do so. You should always contact your insurance provider before buying a policy to find out how long your free look period is, as this can vary from company to company.
Policyholders in Missouri, as in the rest of the country, are given a 30-day grace period if they miss a payment. Your coverage cannot be canceled during these 30 days, and as long as you make a payment before the 30 days is up, your policy will remain in effect. And, if you pass away during the grace period, your policy’s full death benefit must be paid as long as the claim is otherwise valid.
If a life insurance provider in the state of Missouri goes bankrupt or is unable to pay claims, the Missouri Life and Health Insurance Guaranty Association will provide coverage for its policies. Each policyholder is covered for a cash value of $100,000 and a life insurance death benefit of $300,000.
Factors such as your age, health, and even gender can all affect the cost of your premiums. Contact one of our EZ agents for the quickest and most accurate quotes on the perfect policy for you. But to give you an example of what life insurance premium prices might look like, a healthy 31-year-old man who does not smoke could pay anywhere from $15 to $49 per month for a $625,000 policy with a 20-year term in Missouri.
Missouri Life Insurance Resources
In Missouri there are several resources in place to help you if you have any problems with your insurer or policy. One of these resources is:
- Missouri Life & Health Insurance Guaranty Association – Any company offering life insurance or annuities in Missouri must be a member of the Missouri Life & Health Insurance Guaranty Association. The policyholders of a guaranty association member company will be safeguarded in the event of the member company’s liquidation due to financial difficulties.
Does Missouri 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 Missouri?
In Missouri, there are many good ways to get life insurance. Allstate, Kansas City Life, Brighthouse Financial, Amica Mutual, and Penn Mutual are at the top of the list.
How much does life insurance cost in Missouri?
There are many things that can affect how much life insurance costs, but here’s an example. For a 20-year term policy that costs $625,000 and lasts for 20 years, a healthy 31-year-old woman in Missouri will pay an average of $27.29 per month. A healthy 31-year-old man, on the other hand, will pay about $30.18 for the same policy.
EZ Can Help!
We at EZ understand that you have unique requirements, priorities, and financial constraints, and that you want the best for your family without depleting your savings account. But we also know that finding the right policy can be frustrating. So, we make every effort to simplify the process of purchasing life insurance. And we do everything we do 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.