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How Life Insurance Works in Ohio
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Types of Life Insurance Available in Ohio
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Term Life Insurance
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Permanent Life Insurance
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Ohio Life Insurance Laws
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The Cost
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Ohio Life Insurance Resources
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FAQs
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EZ Can Help!
How Life Insurance Works in Ohio
A life insurance policy is essentially an agreement between you and the insurance company you select. If you die while your policy is still active, and if you have continued to make the required premium payments, your insurance company will give your loved ones (your beneficiaries) the death benefit you selected when you purchased the policy. The death benefit is paid as a lump sum that can be used for any purpose. From covering final expenses to funding higher education.
If you have debts, dependents, or other financial obligations that must be met after your death, life insurance is a must-have. This is especially true if you are the sole breadwinner in your family. Life insurance is essential to ensure your loved ones are taken care of financially in the event of your passing.
Types of Life Insurance Available in Ohio
There is a wide variety of life insurance policies available on the market, so there is absolutely one out there that will work for you. But because there are so many options to choose from, you’ll have to know what you want out of a policy. The first decision you’ll have to make is between the two main types of life insurance: term life and permanent life.
When deciding between term life insurance and permanent life insurance, your budget and how far into the future you think you’ll need the coverage are the two most important factors to consider. You should also think about what extra features, if any, you are interested in.
Term Life Insurance
Because of its low premiums, term life insurance tends to be the more popular type of life insurance. Term life insurance policies are more affordable because these policies will not cover you indefinitely. Instead, you choose how long the policy will remain in effect, or your policy’s “term.” A policy’s term can be anywhere from one year to 30 years, but the average term length is 15 years. Your beneficiaries will receive a tax-free death benefit if you pass away while the policy is active. With most types of term life insurance, your premiums will never change.
There are several types of term life policies available, including:
Level Term Life Insurance
Both the death benefit and the premiums for level term life insurance are locked in at the time of purchase. So, they will remain unchanged for the entire term of the policy. The vast majority of people go with level term policies when they purchase term life.
Annual Renewable Term Life Insurance
Annual renewable life insurance is a term life insurance policy that lasts for a year. Policies are renewable annually, but the premium increases with each passing year.
Increasing Term Life Insurance
Your policy’s death benefit will grow at regular intervals if you have an increasing term life insurance policy. Your benefit amount might increase annually by 5%, for instance. Unlike with other types of term life, the cost of increasing term insurance premiums is likely to fluctuate over time.
Decreasing Term Life Insurance
With decreasing term life insurance, the premium will not change, but the death benefit gradually decreases as time passes. These policies are typically purchased for coverage while repaying a mortgage or other loan. So, as the loan is repaid, the death benefit will decrease.
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. However, many people find the return of premiums feature very attractive.
Permanent Life Insurance
Permanent life insurance is different from term life insurance will remain in effect for the rest of your life. As long as you continue to pay your premiums. Premiums for permanent life insurance are typically higher than for term life insurance because of this. It’s also more expensive because of the fact that permanent life insurance policies typically include a cash value component that builds over time.
There are numerous types of permanent life insurance policies available, including:
Whole Life Insurance
Whole life insurance includes a guaranteed death benefit and can accumulate cash value. Interest on the cash value accrues at a predetermined, tax-free rate for the life of the policy.
Universal Life Insurance
The flexibility of a universal life insurance policy is unparalleled. You can adjust both your premium payments and your death benefit with this policy. You can eventually use your cash value to pay your premiums if you’d like, and/or you can reduce the amount of your death benefit at any time to lower your premiums.
Indexed Universal Life Insurance
This type of universal 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
A variable universal life (VUL) policy’s cash value, like the cash value of other universal life insurance policies, can be invested, but with VUL you can invest in subaccounts, which are similar to mutual funds. And like with traditional universal life insurance, the premiums of VUL policies can be adjusted.
Final Expense Life Insurance
If you are older or have health issues that could make it difficult to get a standard policy, final expense insurance may be a good option. These policies don’t require a medical exam, but can be costly and typically pay out a smaller death benefit between $2,000 and $35,000. The death benefit from final expense insurance is intended to pay for the costs associated with funeral, burial, or cremation. But your beneficiaries will be free to use the money however they like, be it a vacation or paying off some bills.
Ohio Life Insurance Laws
The federal government has delegated much of its responsibility for regulating insurance industries and protecting consumers to the states. In addition to Title 39 of the Ohio Revised Code, which is the primary source of regulation for the insurance industry in Ohio, there are a number of other consumer protection laws in place in Ohio. The insurance industry in Ohio is regulated by the Ohio Department of Insurance.
You should pay close attention to the following guidelines:
Free Look Period
Many states have legally mandated “free look periods” that allow people to test drive their life insurance policies (with the option of a full refund) before committing to them fully. Ohio, though, does not have a state-mandated free look period. Having said that, most life insurance companies in the state offer a free look period, so check with your insurance company to see if a free look period is available. Although not legally required, many insurers will still provide a one- to two-week free trial period.
Grace Period
According to Ohio law, insurers must give clients a 30-day grace period, which means that if you miss a payment, you will have 30 days to make a payment before your insurance company cancels your policy. This time frame is intended to keep an insurance company from withholding a claim because of a minor payment delay. If you die during the grace period, your life insurance company must still pay your beneficiaries’ claim.
Benefit Guarantee
Your life insurance policy in the state of Ohio will be protected even if the life insurance company that issued it goes out of business. You will be covered for up to $300,000 in death benefits and $100,000 in cash value by the Ohio Life and Health Insurance Guaranty Association.
Your insurer must have been authorized to do business in Ohio and you must be current on premium payments to be eligible for benefits from the Ohio Life and Health Insurance Guaranty Association.
Settlement Timelines
Payment on life insurance claims must be made within two months of being received by your insurance company in Ohio. This statute was enacted to ensure the prompt payment of benefits to policyholders. Interest will begin to accrue on your claim if the insurer delays payment.
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 $15 to $48 per month for a 20-year $614,000 policy in Ohio.
Ohio Life Insurance Resources
In Ohio, there are several resources in place to help you if you have any problems with your insurer or policy. These resources include:
- Ohio Life & Health Insurance Guaranty Association – In the event that a life or health insurance company authorized to do business in Ohio goes bankrupt, OLHIGA will step in to cover policyholders. In such an event, the Association will pay up to $300,000 in death benefit payments.
- Insurance Complaint Center – Life insurance policyholders in Ohio who are having trouble with their premiums, surrenders, claims, policy loans, or any other aspect of their policy can contact the state’s Insurance Complaint Center for assistance. You can file a complaint or see how many people in general have complained about a specific company through its website.
- Ohio Attorney General’s Office Consumer Protection Section – The Consumer Protection Section of the Attorney General’s Office can help you if you’ve been a victim of a life insurance scam. In addition, the division disseminates alerts regarding common insurance frauds so that policyholders are aware of the risks they face.
FAQs
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Does Ohio 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 Ohio?
There are a lot of good ways to get life insurance in Ohio. At the top of the list are Northwestern Mutual, Lincoln Financial, State Farm, Prudential, and Western & Southern Financial.
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How much does life insurance cost in Ohio?
There are many things that can change how much life insurance costs, but here’s an example. A healthy 31-year-old woman in Ohio will pay an average of $26.11 a month for a 20-year term policy that costs $614,000 and lasts for 20 years. On the other hand, a healthy 31-year-old man will pay about $29.63 for the same policy.
EZ Can Help!
At EZ, we get that everyone has unique requirements, priorities, and financial constraints. We also understand that you want the best for your family without breaking the bank. So, we make every effort to simplify the process of purchasing life insurance. We 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.
