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How Life Insurance Works in Oregon
Types of Life Insurance Available in Oregon
Term Life Insurance
Permanent Life Insurance
Oregon Life Insurance Laws
The Cost
Oregon Life Insurance Resources
FAQs
EZ Can Help!
How Life Insurance Works in Oregon
A life insurance policy is a legal contract between you and the insurer you choose. You agree to pay your premiums to maintain your policy. If you die while your policy is active, your loved ones (or beneficiaries) will receive the policy’s designated death benefit. The death benefit is paid as a lump sum that can be used for anything your beneficiary desires. Such as debt repayment or college tuition.
If you have dependents, debts, or other financial obligations that will still be in place after your death, life insurance is a must. And, if you are the sole provider for your family, life insurance is especially essential to protect their financial security in the event of your death.
Types of Life Insurance Available in Oregon
There are numerous options on the market today when it comes to life insurance, so you’re sure to be able to find the policy for you. But you’ll have to know what’s out there, so you can decide what’s right for you. The first decision regarding your policy that you’ll need to make is between the two main types of life insurance: term life and permanent life.
When deciding between term and permanent life insurance, the two most important factors to consider are budget and how long you want to be covered for. For example, you can choose a policy that you can set and forget. Or you can choose to be covered for the amount of time that you will be repaying a loan. You’ll also need to think about what extra features, if any, you want included with your policy.
Term Life Insurance
Because of its low premiums, term life insurance has become the more popular type of life insurance. Term life insurance policies are less expensive because they do not cover you indefinitely. Instead, you get to choose how long the policy lasts. A policy’s term can range from one year to thirty years, with fifteen years being the most common. Your beneficiaries will receive a tax-free death benefit if you die while the policy is active. Most types of term life insurance have premiums that do not increase over the course of the policy’s term.
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 both set at the time of purchase and guaranteed to stay the same. When it comes to life insurance, the vast majority of people opt for level term policies.
Annual Renewable Term Life Insurance
Annual renewable life insurance is a one-year term life insurance policy. Policies can be renewed on an annual basis, but the premiums rise with each passing year.
Increasing Term Life Insurance
If you have an increasing term life insurance policy, the death benefit will grow at regular intervals. For example, your benefit amount could rise by 5% per year. Increasing term insurance premiums, unlike those of other types of term life insurance, are likely to fluctuate over time.
Decreasing Term Life Insurance
The premiums for decreasing term life insurance will never change, but the death benefit will decrease over time. The most common reason for purchasing this type of policy is to provide coverage while repaying a loan or mortgage. As the loan is repaid, the death benefit decreases.
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. ROP policies are significantly more expensive than other types of term life insurance. But many people find the return of premiums feature very attractive.
Permanent Life Insurance
Permanent life insurance differs from term life insurance in that it will cover you for your entire life as long as you continue to pay your premiums. Because of this, permanent life insurance premiums are typically higher than term life insurance premiums. Permanent life insurance policies are also more expensive because they typically include a cash value component that accumulates over time and earns interest.
There are numerous types of permanent life insurance policies available, including:
Whole Life Insurance
Whole life insurance provides a guaranteed death benefit as well as the ability to accumulate cash value. For the duration of the policy’s term, interest accrues at a predetermined, tax-free rate.
Universal Life Insurance
The adaptability of a universal life insurance policy is unparalleled. You can modify both your premium payments and your death benefit with this policy. You can eventually use your cash value to pay your premiums if you want, and/or you can also choose to reduce the amount of your death benefit at any time to lower your premiums.
Indexed Universal Life Insurance
This type of permanent life insurance has a cash value that is tied to a stock index. So, you can earn money if your stocks do well. The premiums for this policy can be adjusted in the same way that they can be for a universal life policy as the cash value of the policy increases. Your indexed universal life insurance (IUL) could eventually become a no-premium policy, with the cash value covering the entire premium.
Variable Universal Life Insurance
The cash value of a variable universal life (VUL) policy, like the cash value of other universal life insurance policies, can be invested. But with VUL, you can invest in subaccounts that are similar to mutual funds. VUL policies, like traditional universal life insurance, have adjustable premiums.
Final Expense Life Insurance
If you are older or have health issues that make it difficult to obtain a standard policy, final expense insurance may be a good option. These policies do not require a medical examination, but they are costly. They also have small death benefits ranging from $2,000 to $35,000. The final expense insurance death benefit is intended to cover the costs of your funeral, burial, or cremation. But your beneficiaries will be free to spend the death benefit money however they see fit, such as on a vacation or to pay off some debts.
Oregon Life Insurance Laws
In the case of life insurance policies, the federal government has largely delegated the responsibility of regulating the insurance industries and protecting consumers to the states. The primary regulating force behind the insurance industry in the state of Oregon is Title 56 of the Oregon Revised Statutes (Chapters 731-752), but other legal provisions have also been adopted as consumer protection laws. The Oregon Insurance Division (part of the Department of Consumer and Business Services) regulates the state’s insurance industry.
The following are the most important rules that may apply in your situation:
Free Look Period
A “free look period” in life insurance refers to the time frame during which new policyholders can cancel their policy and receive a full refund. These periods, which are typically a few weeks long, allow you to review your recently signed life insurance document, test drive your policy, or simply change your mind if you have buyer’s remorse. Unfortunately, there is no legally mandated free look period in Oregon. Having said that, many life insurance companies will give their policyholders a free look period if they decide to sign up.
Grace Period
According to state law, life insurance policies in Oregon cannot be canceled for “reasonably” late premium payments. Oregon’s legislature defines “reasonably” as 30 days. So, if you fail to pay your insurance premium on time, you have 30 days to make up for it before your life insurance company can legally cancel your policy.
Benefit Guarantee
If your life insurance company in Oregon goes out of business, your insurance policy will still be guaranteed by the Oregon Life and Health Insurance Guaranty Association. Your policy will be protected by the Oregon Life and Health Insurance Guaranty Association for up to $300,000 in lost death benefits and $100,000 in lost cash value.
To be eligible for this assistance, your insurer must be licensed to operate as a life insurance company in the state of Oregon.
Settlement Timelines
In Oregon, life insurance companies are required by law to pay claims within 30 days of receiving proof of death. If they do not pay the beneficiary’s benefit within this time frame, the beneficiary’s account will accrue interest, and the life insurance company will face legal consequences.
The Cost
The amount you pay for your premiums will be affected by factors such as your age, health, and even your gender. The quickest way to find out what you can expect to pay for a policy is to get in touch with one of our EZ agents. They will be able to use the information you give them to find you free quotes that are tailored to you. But to give you an example of prices, a healthy 31-year-old man who does not smoke could pay anywhere from $22 to $59 per month for a 20-year $809,000 policy in Oregon.
Oregon Life Insurance Resources
In Oregon, there are several resources in place to help you if you have any problems with your insurer or policy. These resources include:
- Oregon Life & Health Insurance Guaranty Association – If a life or health insurance company licensed to do business in Oregon declares bankruptcy, OLHIGA will step in to protect policyholders. The Association will pay up to $300,000 in death benefits on your life insurance policy in this case.
FAQs
Does Oregon 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 Oregon?
There are a lot of good ways to get life insurance in Oregon. At the top of the list are State Farm, New York Life, Lincoln Financial, John Hancock, and Prudential.
How much does life insurance cost in Oregon?
There are many things that can change how much life insurance costs, but here’s an example. For a 20-year term policy that costs $809,000 and lasts for 20 years, a healthy 31-year-old woman in Oregon will pay an average of $26.12 per month. On the other hand, a healthy 31-year-old man will pay about $29.90 for the same policy.
EZ Can Help!
Everyone has unique requirements, priorities, and financial constraints. At EZ we understand that you want to find financial security for your family without depleting your savings account. And we also know how difficult finding the right policy can be. So, we make every effort to simplify the process of purchasing life insurance and offer all of our services for free. You won’t have to pay a dime 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.
