Life insurance is a valuable resource that helps protect your loved ones after your death. It pays for your funeral and burial cost, leaves your loved ones an inheritance, and can pay any remaining debt like medical expenses. Before buying a policy, it’s important to understand how different laws affect can affect life insurance. Insurance companies are regulated by state laws, but some plans such as employer sponsored plans are regulated by federal laws.
Also, some states are community property states, which means that both spouses own an equal share of the life insurance if it’s acquired during the marriage. If you’re married and trying to get life insurance, you won’t have to worry about your income being used to determine premiums. So, regardless how much you earn, in most states age and gender will determine your premium.
Does Your Medical Insurance Carrier Play a Role?
Your medical insurance carrier can play a role in getting life insurance. For example, if you qualify for Medicaid, you’re typically capped at $2,000 in a number of assets you can have, including life insurance. The good news is that some states have higher asset limits. Also, if you purchase a life insurance policy and you’re not able to make the monthly premium payment, there are consumer protection laws that prevent your policy from being canceled due to missed payments.
Understanding your state’s laws about life insurance is the first step in purchasing a policy.
Now that you’ve become more familiar with the basics of life insurance, take the following test to check your knowledge.
Life Insurance Policy Quiz
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