Types of Policies in Illinois and their Exclusions

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If you’re looking for affordable life insurance in the state of Illinois, then you’ve come to the right place.

Life insurance is not as complicated as you think and we can help you decide on which type of life insurance coverage is best for you.

If you’re in a hurry, you can run a term or whole life quote using our quote form on the right.  It only takes a minute.

We’ll show you the different types of life insurance you can buy and give you some really good reasons why it’s so important for you and your family.

Why Buy Life Insurance in Illinois?

This answer actually applies to people who live in any state.

The main reason you need life insurance is because it provides a financial security blanket for your family should you die.   Having a life insurance policy will assist your family to cover the financial needs when that income is no longer coming to the family.

How Much Life Insurance do you Need?

Before you buy life insurance, the main consideration you want to take into account is how much you think your family will need to maintain their standard of living.  You will have to consider all your outstanding debts; especially if you aren’t covered by health insurance should you have a major illness or incur major medical expenses and succumb to the disease or injury.

You also want to consider future monthly expenses that will have to be continued to be paid after your gone such as your mortgage or rent payments, plus day to day living expenses which should be extended over a period of time. You may also want to factor in other major expenses such as your children’s tuition expenses for college or university.

The cost of living is expensive so you want to give your reasons for getting life insurance some thought before you buy.

Some Facts About Illinois Life Insurance

In Illinois, you should know that some clauses are applicable regardless of the life insurance you buy. This includes:

1. Free Look Period and Grace Period– When you buy a policy, you are not automatically stuck with it, because you have up to a 10 day minimum to look over the policy so you are comfortable you bought the right policy.  If you change your mind, you can return the policy for a full refund.

Also, the insurance company is required to give a 30 day grace period before you make your premium payment.

2. Incontestability Clause – When you buy a policy, and should you die within the first two years of the policy, the insurance company can conduct a full investigation of the information you provided on your medical questionnaire.  If you have fudged your information or deliberately withheld information, the insurance company would be within its right to deny the claim.

However, if you have had an insurance policy for more than 2 years, the insurance company cannot null your policy except where you have failed to make the premium, or unless they prove deliberate fraud.

Types of Illinois Life Insurance Policies

You have two basic types of life insurance policies choices in Illinois, and this includes term life insurance and permanent life insurance.

What’s the difference?

Term Life Insurance

Term life provides coverage on a temporary basis.  It is the most affordable and easiest form of life insurance that you can buy.  Although you could potentially be covered up to age 95 with term life insurance, you buy it for periods of time called terms such as 10, 15, or 20 years, which means to premiums are guaranteed to stay level for that initial term.

Term life insurance is very practical for people who want a large affordable amount of life insurance but only for a specific time frame. You can also buy different types of term insurance such as:

1. Level term which means your premiums remain the same over the term you have chosen.

2. Decreasing term which means that the death benefits decrease but the premium remains the same.  This is a very popular type of term insurance for those who want to use term insurance instead of buying more expensive mortgage insurance.

3. Increasing term which means the death benefits will increase at different periods in the life of the term and the premiums increase accordingly.  This is a very practical policy for those younger people on a budget and just starting out.

Permanent Insurance

This type of life insurance is quite a bit more expensive because not only does it cover you for life for death benefits; it also has a cash accumulation feature as well.  There are 3 types of policies you can buy which include the more popular whole life and universal life, and variable life.

Let’s briefly look at their differences.

Whole Life Insurance

Whole life has fixed rate premiums.  It has a cash value feature which accumulates over time.  A portion of your premium goes towards the cash value feature.  Should you cancel your policy, you will receive the cash value you have accumulated up to the point of cancellation.

Should you die while the policy is in force, your beneficiaries will receive not only your the initial face value as a death benefit, but also it’s common for dividends to buy additional insurance by way of what are called “paid up additions”, so the death benefit could actually be higher than the face value at the purchase of the policy.  You also have the option of borrowing against the accumulated value as well.

There are a number of variations in how you can buy whole life insurance, but I suggest you give me a call to discuss these options in more detail.

Universal Life Insurance

Universal is similar to whole life except that its main feature allows you the option of having more flexible premiums.  The cash value portion also allows you to earn a minimum guaranteed rate of interest along with receiving a higher rate of interest in certain scenarios, the most common of which, when the S&P 500 goes up, in the example of an equity indexed UL.  You can also change the amount of death benefits during the life of this policy to better reflect your needs.  There are also variations of this type of policy but again, it would be better to contact me so I can explain your options.

Variable Life Insurance (We do not sell this)

Variable life insurance has a combination of the features found in both whole life and universal life with a few other differences.  You can select the premium you pay and the face amount of the policy.  It also gives you more options on the investment portion of the cash value accumulation.  Due to the investment component, we don’t sell this type of policy.

We are one of these independent agencies, licensed with over 30 life insurance companies, so when you come to us for help, you’ll know the quotes we provide you are the absolute lowest prices available.  For more information or to get started with an application for Illinois life insurance, sign up for some quotes using our instant quote form on the right or call us at 877-996-9383.