A life insurance policy is an important tool for protecting your family’s financial future. But finding the right one for you can be a daunting task. Since prior to making the investment in a policy in the state of West Virginia, there is a lot to take into consideration. There are a lot of policy types to learn about. As well as a wide variety of regulations you should be aware of. Before making a purchase, it is in your best interest to become as knowledgeable as possible about the life insurance market in West Virginia. But you don’t have to do it alone. EZ is here to help you make the most well-informed decision possible.
How Life Insurance Works in West Virginia
A life insurance policy is essentially a contract between you and the insurance company that will provide the coverage. You agree to pay the designated premiums. Then if you die while the policy is still active, your chosen beneficiaries will receive a one-time, lump-sum death benefit from the insurance company. They will be able to use this payout for anything they choose. Like repaying a mortgage, saving for the future, or replacing your income.
Types of Life Insurance Available in West Virginia
Because there is such a variety of policies to choose from, it is possible for virtually anyone to find a life insurance policy that is right for them. But as you start looking for the policy that is right for you, you will have a lot of choices to make. The first thing you’ll have to decide is which of the two main types of life insurance will work best for you: term life insurance or permanent life insurance.
When choosing between term and permanent life insurance, one of the most important considerations to make is how long you want your coverage to last. You might want a policy that covers you indefinitely. Or you might only want to pay for coverage while your family is young or while you have significant financial obligations. You’ll also have to think about how much you want to spend on premiums.
Term life’s lower premiums help to explain its popularity. This type of policy tends to be cheaper than permanent life because it will not cover you indefinitely. Instead, when you buy term insurance, you choose the length of time the policy will cover you. The term length of an insurance policy will typically be 15, 20, 25, or 30 years. Your beneficiaries will receive a tax-free death benefit if you die while the policy is still in effect. These policies are fairly straightforward. And they usually have premiums that are guaranteed to remain the same for the entire term of your policy.
There are several types of term life policies available, including:
Level Term Life Insurance
With level term life insurance, the death benefit and premiums are fixed at the time of purchase and will remain unchanged for the duration of the policy. Most people who purchase term life choose level term life insurance.
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 every year. But your premiums will most likely go up each time you do.
Increasing Term Life Insurance
The death benefit of an increasing term life insurance policy will continue to increase over the course of the policy’s coverage period. For example, the value of your death benefit might increase by 5% each year. Unlike with other types of term life insurance, there is a chance that the annual premiums for increasing term insurance will increase or decrease at some point.
Decreasing Term Life Insurance
With this type of policy, the death benefit will gradually decrease over the course of the policy. While the premium will stay the same. Decreasing term life is typically purchased for coverage while repaying a mortgage or loan. As the loan is repaid, the amount of the death benefit decreases.
Return-of-Premium Life Insurance
With return-of-premium (ROP) insurance, your premium payments will be refunded if you don’t die before the policy’s expiration date. Many people find the return of premiums feature appealing. But 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
There are a few significant differences between term life and permanent life insurance. First, your permanent life insurance policy will remain in effect for the rest of your life if you continue to pay your premiums on time. Next, most permanent life policies include a type of savings account, known as cash value. Which you can borrow against or even use to pay your premiums. Finally, because of these features, premiums for permanent life policies are typically higher than those of term life policies.
There are numerous types of permanent life insurance policies available, including:
Whole life insurance not only provides a benefit to beneficiaries upon death, but it also includes a savings component. Which means that as you pay your premiums, a cash value accumulates. The interest on your cash value will be accrued at a fixed, predetermined rate, and will be tax-deferred.
If you choose universal life insurance, you will have a lot of options and flexibility. You will be able to change the value of the death benefit and the amount of your premium payments at any time. You can lower your premium payments by either using the cash value you have accumulated. Or by lowering the amount of your death benefit.
Indexed Universal Life Insurance
Indexed universal life, or IUL, insurance also includes cash value, but the interest rate of its cash value is not fixed. You can invest your money in a stock index, which is a predetermined grouping of various stocks. IUL premiums, like other universal life policy premiums, can change. They can increase or decrease in proportion to the cash value of the policy. One day, the cash value may be sufficient to cover everything, and you will no longer be required to pay the premium.
Variable Universal Life Insurance
The cash value of a variable universal life (VUL) policy, like the cash value of other types of universal life insurance policies, can be used to make investments, but VUL’s cash value can be invested using subaccounts, which are similar to mutual funds. Premium adjustments are possible, just as they are with traditional universal life insurance.
A final expense insurance policy pays out a small death benefit, typically $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 service. Your beneficiary, though, 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.
These policies can be expensive considering their relatively small payouts, but they can be good options in certain situations. For example, if you are older or in poor health, you might want to look into one of these policies, since they do not require a medical exam.
West Virginia 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 Maryland is Chapter 33 of the West Virginia Code, but other legal provisions have also been adopted as consumer protection laws. The West Virginia Insurance Commission regulates the state’s insurance industry.
The following are the most important rules that may apply in your situation:
Free Look Period
West Virginia residents who purchase life insurance are given a “free look period.” During the “free look” period, you will have the option to cancel your coverage and receive a full refund within a certain time frame. West Virginia requires a minimum free look period of 10 days.
In West Virginia, you will be given a four-week grace period if you miss a premium payment. This means that, as long as you make a payment before these four weeks are up, your insurance company will not be able to cancel your policy. In addition, if you die during your grace period, and a valid claim is filed, your insurance company must still pay the claim in full to your beneficiaries. The grace periods help to keep policies from going into “lapsed” status, which may necessitate a larger payment and even underwriting to reinstate your policy.
Although bankruptcies among insurance companies are uncommon today, they do occur. The West Virginia Life and Health Insurance Guaranty Association was established to provide up to $300,000 in death claims and up to $100,000 in cash value to policyholders whose insurers go bankrupt. The guarantee is helpful, but it is capped at the above-mentioned amounts.
Your premium price may vary depending on factors like your age, health, and even your gender. For the quickest and most accurate information on potential costs, contact one of our EZ agents. They will use the information you provide to tailor free, no-obligation quotes specifically to your needs. But to give you an example of premium prices, a healthy, nonsmoking 34-year-old man could pay anywhere from $13 to $57 per month for a policy with a face value of $530,000 and a term of 20 years in West Virginia.
West Virginia Life Insurance Resources
In West Virginia, there are several resources in place to help you if you have any problems with your insurer or policy. These resources include:
- West Virginia Offices of the Insurance Commissioner’s Consumer Services Division – This division acts as a go-between for policyholders and insurers. Visit their site to get more information about life insurance, file a complaint, or access the National Association of Insurance Commissioners’ policy locator tool.
- West Virginia Life & Health Insurance Guaranty Association – The state guaranty association can help consumers who could lose benefits if a company goes bankrupt. In the event that an insurance company is unable to honor its obligations, the association will continue to provide coverage up to the maximum allowed by law.
- West Virginia State Treasurer – In the event that a policy’s beneficiary cannot be located, the funds will be forfeited to the state. You can check for unclaimed funds in your name with the state treasurer’s website and file a claim if you find any.
Does West Virginia 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 West Virginia?
There are a lot of good ways to get life insurance in West Virginia. At the top of the list are Northwestern Mutual, State Farm, Transamerica, Globe Life Inc., and Prudential.
How much does life insurance cost in West Virginia?
There are many things that can affect how much life insurance costs, but here’s an example. A healthy 34-year-old woman in West Virginia who wants a $530,000 20-year term policy that lasts for 20 years and costs on average $23.08 per month will pay for it. A healthy 34-year-old man, on the other hand, will pay about $43.60 for the same policy.
EZ Can Help!
We at EZ understand that you want the best for your family without breaking the bank. We also know that finding the right insurance policy for you can be a hassle. So, we make every effort to simplify the process of purchasing life insurance for you. And we offer 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.