There is a lot to think about before purchasing a life insurance policy in the Badger State. If you’re looking to financially protect your family with life insurance, you’ll find that there are a lot of policy types to sort through. As well as a number of rules and regulations to be aware of. You should learn as much as you can about the life insurance market in Wisconsin before making a purchase. But we get that this can feel like an overwhelming task, so EZ is here for you every step of the way. We’ve laid out a comprehensive guide to life insurance in Wisconsin below. Once you’ve read it, speak to an EZ agent about finding the perfect policy for you.
How Life Insurance Works in Wisconsin
You and your chosen insurance company enter into a legal agreement when you purchase a life insurance policy. You agree to make timely premium payments to your insurer. And if you die while the policy is active, a lump-sum death benefit will be paid out to your named beneficiaries.
Types of Wisconsin Life Insurance
With so many options, it’s easier than ever to find a life insurance policy that fits your budget and your family’s specific requirements. But because there are so many options out there, you’ll have to make a lot of decisions about what you want out of your policy. The first decision you’ll need to make is between the two main types of life insurance: term life insurance and permanent life insurance.
One of the most important things to think about when deciding between term and permanent life insurance is how long you want your coverage to last. You might want a policy that is in place indefinitely. Or you might prefer to only pay for a policy while you are taking care of some large financial obligations. You’ll also have to consider your budget, and if you want your policy to include any extra features. Such as a cash value savings account.
The lower cost of term life insurance policies has made them the more popular choice. These policies tend to be cheaper than permanent life policies because they will not cover you indefinitely. Instead, you determine how long you’ll be covered by your term insurance policy. In most cases, a policy’s term length will be 15, 20, 25, or 30 years. If you pass away while the policy is active, your chosen beneficiaries will receive an agreed-upon tax-free death benefit. The premium you pay each month is often locked in when you purchase the policy, making this type of policy an easy and straightforward option.
There are several types of term life policies available, including:
Level Term Life Insurance
Both the death benefit and the premiums for a level term life insurance policy will be set at the time of purchase, and they won’t change. Level term 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 will be able to renew your policy each year, but your premiums will most likely go up when you do.
Increasing Term Life Insurance
With an increasing term life insurance policy, the death benefit steadily rises throughout the policy’s coverage period. For example, the value of your death benefit could rise by 5% each year. Increasing term insurance premiums may go up or down over the course of the policy’s term.
Decreasing Term Life Insurance
With this type of policy, the value of the death benefit will gradually decrease over the course of the policy, while the premiums will stay the same. These types of policies are typically purchased for coverage while repaying a mortgage or other loan. As the loan is repaid, the amount of the death benefit decreases.
Return-of-Premium Life Insurance
Return-of-premium (ROP) insurance is a type of term life insurance in which your premium payments are refunded if you don’t die before the policy’s expiration date. 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 types of term life insurance.
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. As long as you continue to pay your premiums on time. Next, permanent life policies usually include a type of savings account, known as cash value. Which accrues interest and can be borrowed against or used to pay your premiums. Because of these features, premiums for permanent life policies are typically higher than those of term 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 when you pay your premiums, you will accumulate a cash value. Interest on your cash value will accrue on a tax-deferred basis at a fixed, predetermined rate.
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 as well as your premium payments at any time. You will be able to lower your premium payments by either using your accumulated cash value, or by lowering the value of your death benefit.
Indexed Universal Life Insurance
Indexed universal life (IUL) insurance policies also include a cash value, but unlike with whole life, your cash value can accrue interest based on investments using a stock index, which is a predetermined grouping of various stocks. Similar to the premiums for other universal life policies, IUL premiums can increase or decrease as the policy’s cash value does. It’s possible that the cash value will grow large enough that you’ll never have to pay another premium.
Variable Universal Life Insurance
The cash value of a variable universal life (VUL) policy, like the cash value of other types of permanent life insurance policies, can be used to make investments. But a VUL policy’s cash value can be invested using subaccounts, which are similar to mutual funds, so you may be able to make more money based on how well your stocks do. 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 between $2,000 and $35,000. The purpose of final expense insurance is to cover final arrangements, such as a burial, cremation, or funeral service, but your beneficiary will be free to do whatever they like with the money.
These policies have their drawbacks: they are often expensive and pay out less than comparable policies. But a final expense policy might be a good option if you are worried about not qualifying for traditional life insurance, since you will not be required to undergo a medical exam to get immediate coverage.
Wisconsin Life Insurance Laws
The federal government has delegated much of its responsibility for regulating insurance industries and protecting consumers to the states. Wisconsin’s insurance industry is primarily governed by Titles 600–655 of the Wisconsin Statutes and Annotations, though other legal provisions have been adopted as consumer protection laws. The insurance industry in Wisconsin is regulated by the Office of the Commissioner of Insurance.
You should pay close attention to the following guidelines:
Free Look Period
If you purchase a life insurance policy in Wisconsin, and you are unhappy with your coverage, you have 20 days to cancel and still receive a full refund. This state-mandated “free look period” gives you a risk-free opportunity to examine your policy before making a final decision.
All insurers in Wisconsin are required to give policyholders at least 30 days after missing a premium payment before their policy is canceled. During this time, your policy will remain active, and will remain active as long as you pay within the month allotted to you.
The Wisconsin Insurance Security Fund backs life insurance policies in the state of Wisconsin. This means you can still collect your benefits if your life insurance company goes out of business. To be eligible for this, your insurer must be licensed to do business in the state, and you must be current on your insurance payments. You are covered by the Wisconsin Insurance Security Fund for up to $300,000 in lost death benefits.
Your premium price may vary depending on factors such as your age, health, and even gender. Contact one of our EZ agents for the quickest and most accurate access to information on potential costs. They will tailor free, no-obligation quotes to your specific needs based on the information you provide. But to give you an example of what premium prices look like in Wisconsin, a 32-year-old nonsmoker could pay between $16 and $52 per month for a policy with a face value of $660,000 and a term of 20 years.
Wisconsin Life Insurance Resources
In Wisconsin there are several resources in place to help you if you have any problems with your insurer or policy. These resources include:
- Wisconsin Insurance Security Fund – This guaranty fund was established by the state legislature to protect policyholders. All Wisconsin insurance companies are required to contribute to the fund, so that if one of them becomes insolvent, you can still receive a benefit payment.
- Office of the Commissioner of Insurance – This is the state agency in charge of all insurance matters in Wisconsin. One of the Commissioner’s responsibilities is to educate the public; if you have any questions, you can browse the online fact sheets or call the Consumer Affairs division.
Does Wisconsin 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 Wisconsin?
There are a lot of good ways to get life insurance in Wisconsin. At the top of the list are Northwestern Mutual, Lincoln Financial, Prudential, American Family Life Insurance Co., and State Farm.
How much does life insurance cost in Wisconsin?
There are many things that can change how much life insurance costs, but here’s an example. A healthy 32-year-old woman in Wisconsin who wants a $660,000 20-year term policy that lasts for 20 years and costs an average of $28.52 per month will pay for it. On the other hand, a healthy 32-year-old man will pay about $31.31 for the same policy.
EZ Can Help!
We at EZ understand that you want the best for your family without breaking the bank. But we also get that looking for the right insurance policy can take time that you don’t have. But that’s why we’re here! We make every effort to simplify the process of purchasing life insurance, and we do it all 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.