Before making a final decision, it is in your best interest to learn everything you can about the North Carolina life insurance market. This might feel like a difficult task, but EZ is here to assist you. First, read our comprehensive guide below. Then contact an EZ agent for help finding the best life insurance policy for you.
Jump To:
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How Life Insurance Works in North Carolina
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Types of North Carolina Life Insurance
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Term Life Insurance
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Permanent Life Insurance
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North Carolina Life Insurance Laws
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The Cost
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North Carolina Life Insurance Resources
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FAQs
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EZ Can Help!
How Life Insurance Works in North Carolina
When you buy life insurance, you enter into a legally binding contract with your chosen insurance company. You agree to pay monthly premiums to the insurance company. Then in exchange for a lump-sum payment to your loved ones (or beneficiaries) if you die while your policy is still in effect. This death benefit can be used for anything your beneficiaries want. Such as mortgage payments, retirement or college savings, or simply replacement of your income.
If you have dependents, debts, or other financial obligations that must be met even if you die, you should seriously consider purchasing life insurance. But if you are the primary or sole provider for your family, life insurance insurance is an absolute necessity. If you die unexpectedly, your policy will ensure that your loved ones can continue to live comfortably.
Types of North Carolina Life Insurance
There are so many different types of life insurance policies on the market these days that almost anyone can find one that is right for them. Because there are so many options, you will have a lot of decisions to make regarding what you want. But the first will be between the two main types of policies:
- Term life insurance
- Permanent life insurance
To make this decision, consider how long you want your policy to cover you for. As well as how much you’re willing to spend, and if you want any extra features included with your policy.
Term Life Insurance
Term life insurance is more popular than permanent life insurance because of its lower premiums. Premiums are typically lower for this type of policy because it will not cover you indefinitely. Instead, when you purchase term life insurance, you specify the length of time you want to be covered. A policy’s term is typically 15 years, but policies with terms ranging from one year to 30 years are available.
These policies are also fairly straightforward. In most cases, the price of your monthly premiums will not change for the entire term of your policy. Your beneficiaries will receive a tax-free death benefit if you die while the policy is still in effect.
There are several types of term life policies available, including:
Level Term Life Insurance
Your death benefit and premium payments will be set at the time of purchase with level term life insurance. So, they will not change during the policy’s term. This is the most common type of term life insurance policy.
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 on an annual basis, but the premiums will rise with each passing year.
Increasing Term Life Insurance
An increasing term life insurance policy’s death benefit grows over the policy’s term. Your benefit, for example, could rise by 5% per year. Term insurance premiums fluctuate over time, unlike those of other types of term life insurance policies.
Decreasing Term Life Insurance
The death benefit of decreasing term life insurance decreases in value over time while the premiums do not change. These policies are typically purchased to provide protection while repaying a loan or mortgage. As the loan is repaid, the value of the death benefit decreases.
Return-of-Premium Life Insurance
Return-of-premium (ROP) insurance reimburses your premium payments if you die before the policy expires. ROP policies are significantly more expensive than other types of term life insurance policies. However, many people find the prospect of receiving their premiums back appealing enough to outweigh the additional cost.
Permanent Life Insurance
Your permanent life insurance policy, unlike a term life insurance policy, will remain in effect as long as you continue to make premium payments. Because of this, permanent life premiums are typically higher than term life premiums, and because permanent life insurance policies typically include a type of savings account that earns interest (known as cash value).
There are numerous types of permanent life insurance policies to choose from, including:
Whole Life Insurance
Whole life insurance not only pays out a death benefit to beneficiaries, but it also has a savings component, which means a cash value accumulates as you pay your premiums. Interest on the cash value will be accrued on a tax-deferred basis at a predetermined rate with these policies.
Universal Life Insurance
This type of policy is highly adaptable because you can modify both the death benefit and the premium payments. Your premium payments will be applied to both the cost of insurance (COI) and the cash value, and you will be able to use the cash value to pay your premiums as it grows. You will also be able to lower your premium by lowering the amount of the death benefit associated with your policy.
Indexed Universal Life Insurance
The cash value of an indexed universal life insurance (IUL) policy, unlike that of a whole life policy, can be invested in a stock index, and so it has the ability to accrue more interest. IUL policy premiums can be adjusted in the same way that universal life policy premiums can: they can increase or decrease with the cash value of the policy. Eventually, you may not have to pay a premium because the cash value will cover the entire cost.
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 VUL policies include investment subaccounts that are similar to mutual funds. And, as with traditional universal life insurance, you’ll be able to adjust your premium payments based on how much cash value you have accrued.
Final Expense Life Insurance
A final expense life insurance policy is a type of whole life insurance policy that pays a small death benefit, usually between $2,000 and $35,000. The death benefit from final expense insurance is intended to cover final expenses such as a burial, cremation, or funeral services, but your beneficiary will be free to spend the death benefit money however they see fit.
This type of policy is often a good choice for those who are older or in poor health, because you will not be required to undergo a medical exam or wait for coverage to begin. Keep in mind, though, that these policies are frequently more expensive than comparable policies, and the death benefit is usually small.
North Carolina 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 North Carolina is Chapter 58 of the North Carolina General Statutes, but other legal provisions have also been adopted as consumer protection laws. The North Carolina Department of Insurance regulates the insurance industry in the state.
The following are the most important rules that may apply in your situation:
Free Look Period
Residents of North Carolina have what’s known as a 10-day free look period after purchasing a life insurance policy to cancel it and receive a full refund. The free look period is intended to give you enough time to carefully read over your policy and decide if it’s what you expected,or to change your policy for one that is more suited to you. As long as you cancel your policy within these 10 days, you will not be subject to any penalties.
Grace Period
In North Carolina, you will have a grace period of at least 30 days if you miss a premium payment. This period will begin the day you miss your payment. State law mandates that your insurance policy cannot lapse during the grace period. You will still be fully covered if you die in this 30-day period, even if you have not made up your missed payment. This grace period prevents the policy from lapsing. Which helps to avoid the need to be underwritten for a new policy.
Benefit Guarantee
Through the North Carolina Life and Health Insurance Guaranty Association, the state of North Carolina guarantees death payments up to $300,000 per person if an insurance provider goes bankrupt or is otherwise unable to make payments. This organization will also guarantee a cash value of $100,000 per person. These limits apply regardless of how large a policy is or how many policies you own.
Settlement Timelines
North Carolina requires that insurance companies pay out death benefits in a timely manner. If a life insurance claim in North Carolina is not paid within 30 days, the death benefit of your policy will begin to accrue interest. This rule is in place in North Carolina to encourage claims to be paid quickly, and it works. In North Carolina, most claims are resolved within a month.
The Cost
Your premium will depend on a number of factors, such as your age, health, and even your gender. For the quickest and most accurate quotes, contact one of our EZ agents. They’ll be able to tell you exactly how much you can expect to pay, based on your answers to a few simple questions. But to give you an example of what premium prices look like in North Carolina, a healthy, nonsmoking 31-year-old man in North Carolina could pay anywhere from $16 to $51 per month for a $649,000 policy with a 20-year term.
North Carolina Life Insurance Resources
In North Carolina, there are several resources available that can help you if you have any problems with your insurer or policy. These resources include:
- North Carolina Department of Insurance – This agency regulates life insurance policies sold in the state and represents policyholders in cases involving unfair claims practices. The DOI provides comprehensive information on locating a lost life insurance policy, dealing with insurance fraud, and filing a complaint.
- North Carolina Life and Health Insurance Guaranty Association – The North Carolina Life and Health Insurance Guaranty Association protects policyholders’ interests if an insurer is unable to pay a claim due to insolvency. It offers death benefits of up to $300,000 and cash value payments of up to $100,000.
- National Association of Insurance Commissioners – The National Association of Insurance Commissioners is a non-profit organization that serves state insurance regulators across the country. You can file complaints with this organization.
FAQs
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Does North Carolina require life insurance?
No, you will never be forced to get life insurance. It is always your choice.
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What are the best life insurance companies in North Carolina?
In North Carolina, there are many good ways to get life insurance. State Farm, Pacific Life, AIG, Metlife, and Transamerica are at the top of the list.
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How much does life insurance cost in North Carolina?
There are many things that can change how much life insurance costs, but here’s an example. A healthy 31-year-old woman in North Carolina will pay an average of $25.35 a month for a 20-year term policy that costs $649,000 and lasts for 20 years. On the other hand, a healthy 31-year-old man will pay about $30.92 for the same policy.
EZ Can Help!
We at EZ know that everyone has unique requirements, priorities, and financial constraints. We also understand that you want to find an affordable policy that will protect your family and won’t break the bank. So, we make every effort to simplify the process of purchasing life insurance. We guarantee that all of our services will always be 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.
