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How Life Insurance Works in Wyoming
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Types of Wyoming Life Insurance
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Term Life Insurance
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Permanent Life Insurance
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Wyoming Life Insurance Laws
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The Cost
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Wyoming Life Insurance Resources
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FAQs
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EZ Can Help!
How Life Insurance Works in Wyoming
When you buy a life insurance policy, you and your insurance company enter into a legally binding contract. You agree to pay the necessary premiums on time. Then if you die while the policy is still active, the insurance company will pay out a lump-sum death benefit to your named beneficiaries. They will be able to use the money for whatever they need. For things like repaying a mortgage, saving for the future, or simply replacing your income.
Types of Life Insurance Available in Wyoming
With so many options, it’s easier than ever to find a life insurance policy that fits your budget and the specific needs of your family. But because there are so many options, you’ll have a lot of decisions to make about what you want out of a policy. The first decision you’ll have to make will be between the two main types of life insurance: term life insurance and permanent life insurance.
When deciding between term and permanent life insurance, one of the most important factors to consider is how far into the future you want coverage. You might want a policy that remains in effect indefinitely. Or you might only want to pay for a policy while you are raising your children or repaying a mortgage. You’ll also need to think about your budget, and if you’d like to pay a little more for extra policy features.
Term Life Insurance
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 choose how long your term insurance policy will cover you for. In most cases, the term length of a policy will be 15, 20, 25, or 30 years. If you die during your policy’s term, your beneficiaries will receive a tax-free death benefit. As agreed when you bought your policy. These policies are fairly straightforward, solid options, since in most cases, the premiums are set and will not change.
There are several types of term life policies available, including:
Level Term Life Insurance
A level term life insurance policy’s death benefit and premiums are set at the time of purchase and will not change. Level term is the simplest and 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 each time you do.
Increasing Term Life Insurance
The death benefit of an increasing term life insurance policy increases steadily throughout the policy’s coverage period. For example, the value of your death benefit could increase by 5% each year. Unlike the premiums of other types of term life insurance, the premiums for increasing term may rise or fall over the life of the policy.
Decreasing Term Life Insurance
With this type of policy, the death benefit gradually decreases, while the premiums stay the same. Decreasing term policies are typically purchased for coverage while repaying a mortgage or other loan. The amount of the death benefit decreases as the loan is repaid.
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. While many people find the return of premiums feature appealing, 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 policies. First, as long you continue to pay your premiums on time, your permanent life insurance policy will remain in effect for the rest of your life. Next, permanent life policies usually include a type of savings account, known as cash value, that accrues interest and that can be borrowed against or used to pay your premiums. Finally, because of these features, permanent life premiums are usually higher than term life premiums.
There are several types of permanent life insurance policies available, including:
Whole Life Insurance
Whole life insurance not only provides a death benefit to beneficiaries, but it also includes a savings component, which means that as you pay your premiums, a cash value accumulates. Interest will be accrued on a tax-deferred basis at a fixed, predetermined rate throughout the term of the policy.
Universal Life Insurance
You will have a larger pool of available options if you choose a universal life insurance (UL) policy. You will be able to change the total value of the death benefit as well as your premium payments at any time with this type of policy. To lower your premiums, you can either apply your accumulated cash value to your account, or you can lower the value of your death benefit.
Indexed Universal Life Insurance
The cash value that comes with indexed universal life (IUL) insurance can be invested using a stock index, which is a predetermined grouping of various stocks, so you have the opportunity to make more money than you would with a set interest rate. 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
Like the cash value of other types of permanent life insurance policies, the cash value of a variable universal life (VUL) policy can be used to make investments, but VUL’s cash value can be invested using subaccounts, which are similar to mutual funds. Premium changes are possible, just like with traditional universal life insurance.
Final Expense Life Insurance
A final expense insurance policy pays out a small death benefit, typically $2,000 to $35,000. The purpose of final expense insurance is to cover the costs of your final arrangements, such as burial, cremation, or funeral service. But with that being said, your beneficiary will be free to do whatever they want 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.
Wyoming 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 Wyoming Insurance Code, found in Title 26 of the Wyoming Statutes, is the primary regulating force for the insurance industry in Wyoming, but other legal provisions have also been adopted as consumer protection laws. The Wyoming Insurance Department regulates the state’s insurance industry.
The following are the most important rules that may apply in your situation:
Free Look Period
Wyoming does not require insurers to give a free look period for new policyholders, but most companies will give their clients one anyway. A free look period allows you to thoroughly review a policy before making a long-term financial commitment. If you are granted a free look period, you will be able to cancel your policy in exchange for a full refund of all premiums paid. The free look period in Wyoming begins when you sign the policy delivery receipt and ends when the company’s self-created free look period expires. In Wyoming, most insurance companies offer a free look period. But the length of time varies between companies and product types, so always check with your agent before committing any money.
Grace Period
If you purchase a life insurance policy in Wyoming, you will have set a minimum period of time to make up a missed premium payment before your insurance company can cancel your policy, known as a grace period. This amount of time has been set by the legislature at 30 days from the payment due date. This protects beneficiaries (since your insurer will still be required to pay any claims if you die during a grace period) and avoids the need for policy owners to go through the underwriting process again.
Benefit Guarantee
Wyoming has consumer protections in place if a life insurance company becomes insolvent and is unable to pay death claims or cash value payouts. The state will make missed death claim payments of up to $300,000 per person and missed cash value payouts of up to $100,000 per person through the Wyoming Life and Health Insurance Guaranty Association. These limits apply no matter how large your policy is, or how many policies you have.
The Cost
Your premium price may vary depending on factors such as your age, health, and even gender, so 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 Wyoming, a 30-year-old nonsmoker could pay between $21 and $43 per month for a policy with a face value of $793,000 and a term of 20 years.
Wyoming Life Insurance Resources
In Wyoming, there are several resources in place to help you if you have any problems with your insurer or policy. These resources include:
- The Wyoming Department of Insurance – This state agency maintains a comprehensive website with general information about life insurance, including a shopper’s guide, as well as several consumer protection services.
- The National Association of Insurance Commissioners – NAIC offers a variety of educational materials to assist consumers in better understanding life insurance and making informed policy decisions. This organization also provides a form for filing complaints against life insurance companies, as well as a policy locator service to assist beneficiaries in locating information about the coverage of a deceased loved one.
- The Wyoming Life and Health Insurance Guaranty Association – The state’s guaranty association protects customers who are at risk of losing coverage due to the insolvency of an issuer. Customers can request additional information through the association’s website, which includes an online form.
FAQs
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Does Wyoming 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 Wyoming?
There are a lot of good ways to get life insurance in Wyoming. At the top of the list are New York Life, Lincoln Financial, Northwestern Mutual, Iowa Farm Bureau Federation, and State Farm.
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How much does life insurance cost in Wyoming?
There are many things that can affect how much life insurance costs, but here’s an example. A healthy 30-year-old woman in Wyoming who wants a $793,000 20-year term policy that lasts for 20 years and costs an average of $27.71 a month will pay for it. A healthy 30-year-old man, on the other hand, will pay about $31.10 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 how frustrating and time-consuming it can be to search for the right policy for you. But that’s why we’re here: to help you! We make every effort to simplify the process of purchasing life insurance, and everything we do is always 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.
