California Life Insurance

The price of coverage for basic (term) life insurance in California is typically $20-$50 per month for each $250,000 of death benefit until you turn 40 years old. After 45 the costs start creeping up higher. Past 65 it becomes much harder to obtain coverage overall due to age and age issues. Permanent life insurance provides you additional financial benefits throughout your life and therefore costs more.

Discuss your life insurance needs with a California licensed insurance agent who can assess your situation and shop all of the alternative options to get you the best-fitting life policy coverage at the lowest cost. Life insurance in California is available from nearly 300 insurance companies. Here are the top 50:

Buying life insurance earlier in life lets you lock in a cheaper rate for the duration of the policy. If you buy a permanent policy, you keep the same low rate for life.

Around 300,000 Californians die every year, so do not wait too long to get your life insurance.

When you die, your life insurance company gives your life policy beneficiaries a lump sum payment, known as death benefits, that can be used for whatever purpose they desire. This sum can be used in paying outstanding bills, burial and final expenses, mortgages, children's school fees, and other unpaid obligations after your death. 

A life insurance policy is critical if you are the breadwinner for your family. It can help provide a cushion for your dependents and assist them with certain financial obligations without going into debt. However, the value you can get from purchasing life insurance is not limited to the death benefit given to the insured's beneficiary. There are some other ways a life insurance policy can provide value to an insured, via the life insurance retirement plan and other living benefits which allow the use of cash values and death benefit while still alive.

In order to get life insurance, speak with a California life insurance agent. A knowledgeable agent with access to multiple insurers can help you compare life insurance quotes from the best life insurance companies in California based on the features you need.

How Does Life Insurance in CA Work

Life Insurance in California - OVERVIEW:

In California, there are two major types of life insurance policies available: Temporary - Term life insurance and cash value (Permanent) life insurance. Term life insurance allows the insured to choose the duration of the coverage, while cash value life insurance is a permanent insurance policy that includes a savings (cash value) component. There are also different variations of these two insurance types.

Life insurance companies in California, including the ones that are domiciled in other states but offer products to the residents of California, are regulated by the California Department of Insurance. Life insurance policies purchased in CA are protected by the California Life & Health Insurance Guarantee Association.

In 2022, 286 life insurance companies were active across the Golden State. Six of them were domiciled in California, while the rest mostly operated from Texas (33), Illinois (29, New York (23), Iowa (19), Nebraska (17), Ohio (16), Connecticut (14), Massachusetts (10), and Arizona (10).

CA LIFE INSURANCE MARKET:

When you decide to look for life insurance, your next step is speaking with a knowledgeable and licensed California life insurance agent or broker who has access to a variety of life insurance companies that offer different competing life insurance products. The agent assesses your needs and then helps you compare policies and features by matching the identified needs to the possible options - to arrive at the conclusion of what is the best life insurance to have in your particular scenario. Speak with a professional and licensed agent to find out how to compare life insurance in California.

Always compare several options before deciding on a policy. If your agent of choice offers life insurance policies from just one life insurance company, seek alternative advice from another qualified California life insurance agent for comparison. After the choice of a desired policy is made, the agent guides and helps the applicant with the application process and communicating with the insurer.

California life insurance agent’s services are free for the consumer. The agent typically gets paid a commission by the insurer through which the insured picks to get coverage.

POLICYHOLDER:

A life insurance policyholder, who is also the insured in most cases, is an individual that owns the insurance policy and has the right to choose the beneficiaries and control the Insurance policy. The owner of the life insurance policy in California may be an individual or an organization.

BENEFICIARY:

A beneficiary, on the other hand, is a person chosen by the insured as the recipient of the death benefits under the policy. A life insurance policy beneficiary could be the insured’s spouse, children, charity organization, business partner, a creditor, or a foundation chosen by the policyholder - entitled to the death benefits.  Your beneficiaries could be a single person or multiple people. The owner of the life insurance policy can change the beneficiary at any time, unless the beneficiary is listed as irrevocable.

For further details on how to change beneficiary on life insurance policy - speak with your life insurance agent.

PREMIUMS / COST / DEATH BENEFIT

Generally, you will be required to make regular life insurance premium payments to keep your California life insurance policy in force. If the policy has a cash value account, you may be able to make payments using the accumulated earnings, without paying out of pocket. In some cases premium financing for life insurance in California may be also available.

The face value of life insurance policy will be determined by the coverage chosen and the cost of premiums you have to pay. Overall, it is essential to consider some factors and needs, such as the amount you can afford to pay for the duration of the policy, long-term coverage goals, and the type of protection you want for your beneficiaries when you die. Beneficiaries can make a claim at any time after your death, but they will need to provide the necessary documents to validate their identity and complete the claims process.

Life insurance companies make lump sum payments, known as death benefits, to a designated beneficiary after the death of the insured. Purchasing life insurance in California is considered a form of financial planning with long-term benefits. It ensures that dependents are comfortable and do not get into financial hardship when the policyholder dies. Death is inevitable, which is why a financial plan that ensures the financial safety of your loved ones is crucial. Upon your death, your life insurance policy entitles the beneficiaries to the predetermined financial support from the insurer.  

The operation of life insurance in California is described in the following sections: 

Free Look Period in California Life Insurance

When you buy life insurance in California, you have a period of time during which you can cancel the policy and get the full refund if you are not happy with the terms of the policy. This timeline is called the life insurance Free Look period. All life insurance companies in California must provide no less than 10 days and no more than 30 days of free look period for life insurance policies sold to the state’s residents.

What Are The Main Types of Life Insurance in California? 

There are two main types of life insurance in California. They are:

• Cash value (Permanent) life insurance
• Term life insurance

What Types of Life Insurance Are in California?

Life insurance in California can be further broken down into types by the policy’s: Purpose, Duration, Grouping, and Subtyping. Make sure to speak with a life insurance agent who is proficient in all the policy types and can provide guidance based on your needs.

PURPOSE of life insurance:

• Private vs. Business - life insurance has multiple applications for business, personal, and estate planning use.
• Death Benefit Only vs. Life insurance with Living Benefits, Cash Value and Retirement Planning.

DURATION of life insurance:

• Temporary - life insurance that expires and is typically purchased as a temporary solution or the cheapest way to get life insurance coverage.
• Permanent - life insurance that stays with you all your life and its cost never changes (Whole Life, IUL, Final Expense, etc.)

GROUPING of life insurance:

• Individual life insurance policy
• Group life insurance policy (27% of life insurance policies in U.S. are group policies, issued by an employer or a sponsoring organization)

SUBTYPING of life insurance based on the specific application or group of insured, i.e.:

• By age category:
  • Life insurance for kids -
  • Life insurance for young adults
  • Life insurance for seniors
• By underlying issues that can hinder the application process, i.e.:
  • Life insurance for diabetics
  • Life insurance for heart disease
• By affiliation:
  • Life insurance for veterans (VA life insurance)
• By profession - if the profession is considered more dangerous than most, i.e.:
  • Life insurance for firefighters
  • Life insurance for police officers
  • Life insurance for pilot

Discuss your specialized life insurance needs with a state-licensed CA life insurance professional.

What Can You Do With Life Insurance in California?

The importance of having a proper financial plan to guarantee the financial safety of your loved ones when you pass away cannot be overemphasized. Life insurance can be one such plan as it can help you provide for your family financially after you die. You can also use your California life insurance while you are alive - for living benefits. Life insurance with living benefits allows you to accumulate tax deferred cash value, to finance retirement, and to use it as a personal bank - to withdraw from or borrow against the cash value component with tax benefits of a life insurance..
You can use life insurance to serve several purposes in California depending on your needs. Some of these purposes are:

1. Inheritance: The death benefits available to your beneficiaries when you pass away could serve as an inheritance. Therefore, even if you do not have properties or substantial assets to leave behind for your loved ones to inherit, life insurance could serve that purpose. If inheritance through the death benefit is the only goal of obtaining life insurance, California term life insurance is likely the best option.  
2. Cover final expenses: Your beneficiaries can use the death benefits from the life Insurance policy to cover any outstanding personal expenses you may leave behind when you pass away. Such expenses could include medical, funeral, education, loan or mortgage, and other outstanding bills. It will enable beneficiaries to settle financial obligations without being overburdened. With 46% of Americans dying with savings of less than $10,000, on average, nearly 70% have unpaid credit card debt and over 35% leave behind homes mortgages that need to be paid.
3. Guaranteed financial safety net for insured's beneficiaries: Life insurance also serves as means of financial stability for your loved ones. The demise of a breadwinner will likely pose challenges for dependents, including financial hardship. A breadwinner can use life insurance to prevent this. Depending on the value of the death benefits to be paid out, the death benefit could be used for children's tuition, family debts, replacement income, and living expenses. Having life insurance could help ensure that any plans you had for your family and your children could be completed even after your death.
4. Life insurance retirement plan: Most people consider life insurance as a means of investment or retirement savings, guaranteeing a steady flow of income. The cash value portion of cash value life insurance allows you to withdraw or borrow during your lifetime to cover urgent needs; this enables you to enjoy living benefits while still retaining the assured death benefits. In addition, a life insurance policy provides tax-deferred cash value, which makes it a good retirement savings option, where the received income can be tax free.
5. Charitable gift: You can purchase a California life insurance policy and use it as a legacy to a charitable organization.  When you pass away, the charity organization will receive a lump sum payment from the death benefit. It offers you an opportunity to fulfill your philanthropic goals 

What is a Premium in California Life Insurance?

A premium in California life insurance is the money that an insured pays to the life insurance provider to guarantee coverage and keep the policy active. As a result, your coverage will lapse if you do not pay premiums, and if it does lapse, your designated policy beneficiaries will no longer be entitled to death benefits when you pass away. Most life insurance companies in California allow you to determine when to pay premiums, which could be monthly, quarterly, or yearly. Prepayment of premiums in advance typically results in discounts.

Premiums can be:

• LEVEL (unchanged) throughout the term of the policy,
• INCREASING - if the policy’s death benefit increases with time,
• DECREASING - if the face value of the death benefit decreases with time (commonly see if life insurance is used to guarantee a loan)
• FLEXIBLE - if the policy’s needs fluctuate.

Life insurance companies in California have various considerations, such as the sex, age, medical records, coverage type, and lifestyle of the insured, to determine life insurance premium. For example, lower insurance premiums are common with young and healthy individuals because insurers consider them as less-risk individuals. In contrast, insurers charge individuals considered as high risk higher premiums since they are more likely to pass away before the policy expires due to age or terminal illness. 

Adjustable Life Insurance

Adjustable life insurance allows the insured to change the amounts of coverage, which also adjusts the amount of the premiums. The higher the death benefit - the more the policy costs. Such policy type is also known as Flexible premium adjustable life insurance.

Premium Financing for Life Insurance

Life insurance premium finance is typically offered to high net worth individuals ($5 million or more) and organizations. In such a setup, the financing bank pays the premiums, while the policy owner guarantees the repayment of interest on the loan with their assets.

Discuss premium financed life insurance with a California life insurance professional.

Is Life Insurance Premium Tax Deductible?

Life insurance premiums are mostly not tax deductible because they are considered a personal expense. However, life insurance premium may be tax deductible in some instances. For example, if the life policy beneficiary is a charitable organization or if you purchase the life insurance policy for business purposes, premiums may be tax deductible - as a business expense.

Speak with a licensed life insurance tax professional in California to know more about the tax implications of your insurance type.

What Is The Death Benefit of a Life Insurance Policy in California?

Death benefit in life insurance refers to the money made available to your dependents and/or other beneficiaries upon your demise by your California life insurance company in exchange for all the premiums paid while you were alive. The amount of the death benefit is also referred to as the life insurance face value (or face value of life insurance).

Death Benefits in California Life Insurance can be: Level, Graded, Increasing, or Decreasing.

• LEVEL - where the face value does not change over the course of the life insurance policy’s life,
• GRADED - graded death benefit life insurance works by slowly increasing the amount of death benefit from the policy’s inception until the end of the waiting period (typically 2-3 years). Graded death benefit is typically part of the guaranteed issue policy, which gets issued with no medical exam,
• INCREASING - increasing death benefit life insurance is where the death benefit amount goes up, the longer the insured stays alive, and
• DECREASING - decreasing death benefit life insurance is where the death benefit becomes smaller with time. Decreasing death benefit is typical for life insurance policies that secure debt. As the loan gets paid off, the underlying death benefit is lowered, until eventually the policy gets canceled after the debt is fully paid off.

In addition to the flexibility of death benefit face amount, the death benefit can be also ACCELERATED. Accelerated death benefit of life insurance is when the death benefit can be partially used by the insured while they are still alive. (Unlike the cash value use for life insurance living benefits, accelerating the death benefit lowers it’s amount - that will get paid to the beneficiaries after you die)

What is a Living Benefit in California Life Insurance?

If you have ever wondered: “Can you use life insurance while alive?”, the answer is yes - you can. Using life insurance while alive is done through the use of life insurance living benefits.
California life insurance with living benefits is a financial tool that gives you the ability to use life insurance for personal use while still alive. The two key aspects of life insurance with living benefits are:

• Cash Value as a Living Benefit - based on the funds in the cash value savings account of permanent life insurance
• Death Benefit as a Living Benefit - based on the face value of the death benefit
  Cash value living benefit option allows you to borrow or withdraw from your life policy’s cash value, almost like from a bank, frequently with tax advantages, and then start using the death benefit to cover the expenses associated with a terminal or chronic illness instead of fully relying on health insurance and savings. Most California life insurance policies provide access to up to 90% of all cash value in the policy as a living benefit. Once you die, the used up funds are deducted from the death benefit payout to the beneficiaries.
  When used to access a death benefit prior to death, living benefits of life insurance may also be referred to as an accelerated benefit rider.
  When you purchase an optional accelerated benefit rider as an add-on to your life insurance, this life insurance with living benefits allows you to access the death benefit funds if you have a terminal sickness or chronic illness. Meanwhile, cash value living benefits are based on the money saved in your cash value savings account and can be used as a source of funds for travel, medical bills, vacation purposes, and a lot more. The choice of how to use your life insurance with living benefits is yours.
  California life insurance companies typically allow the insured to access up to 25% of their death benefit while alive. Those with chronic illnesses may be able to access up to 80% of the available cash in their cash value policies. However, the policyholder will be required to prove the severity of the terminal sickness through a medical record.
  If you are interested in learning about the various living benefits of life insurance available in California - speak with a licensed insurance agent about your needs and possible options to solve them.
   

What is MEC in Life Insurance Policy in California?

MEC in life insurance is an acronym for Modified Endowment Contract.

What is Modified Endowment Contract?

A Modified Endowment Contract is best described as a cash value life insurance policy that exceeds legal tax limits. Policies that have unusually high cash values are considered as investments and are excluded from the tax benefits of withdrawals. In California, you may lose the tax-free benefits associated with cash value life insurance policies if you pay excess money into your life policy, particularly within a short period of time. If a California resident takes early distributions on a MEC, additional tax will be due.
Endowment contract was a response by the government to the actions of insureds in the 1970s when they started abusing the tax-free benefits of life insurance policies. By making large payments to their life policies, insureds gained access to massive tax-free assets. It was in response to this that the government introduced MEC.
For a life insurance policy to be labeled a MEC life insurance, it must meet three criteria:

1. You got the insurance policy on or after June 20, 1988
2. The MEC meets the definition of a life insurance policy
3. It does not meet the requirements of the seven pay test
   Speak with your California life insurance agent or broker about MECs, to see if a MEC can be a viable option to meet your life insurance needs.

Can You Borrow From Life Insurance in California?

Yes, borrowing from life insurance can be done if you own a cash value life insurance policy. Insurance loans allow you to borrow against its accumulated cash value. When you take out a life insurance loan, in a way you are borrowing from yourself. Most insurance companies in California allow insureds to borrow up to 90% of the policy cash value. You can borrow against your life insurance policy’s cash value without having to satisfy any special conditions or loan requirements, and you can use the funds for whatever purpose you desire. However, if you do not repay the loan, the insurer will deduct the money from the death benefit payout to your designated beneficiary when you die.
If you are not planning to repay the loan, make sure to keep up with the monthly premiums, so the life insurance policy does not lapse. If it does lapse, you could be faced with extra taxes and/or having to repay the loaned out funds.
The most common life insurance that you can borrow from in California is Indexed Universal Life insurance (IUL).

How Soon Can I Borrow Money From My Life Insurance Policy?

You can start borrowing from your life insurance as soon as your cash value account accumulates enough funds. Since different types of cash value life insurance policies accrue cash value at different rates and on different terms, your wait can be longer or shorter. Most cash value life insurance policies start showing enough cash value reserves to sustain borrowing after 3 to 7 years.
For more information and to discuss how to borrow from life insurance, speak with a licensed California life insurance agent who is proficient in life insurance cash value loans.

What Is a Rider in Life Insurance in CA?

A rider attached to a life insurance policy is a feature that can be added to complement your existing life insurance coverage, especially for extra protection. Riders in insurance can provide coverage that may have been excluded from your original California life insurance policy. There are different types of policy riders to address different purposes, and some may be for a specific period while others could last until the maturity of the policy. You should note that riders in insurance policies will typically attract additional costs, but they will ultimately cost less than if you have to purchase a separate insurance policy to satisfy that need.

Is There a Deductible in Life Insurance?

There is no deductible in life insurance in California. A deductible is an amount that an insured has to pay as part of the total cost of offsetting a claim - typically in property damage insurance.

What is Modified Life Insurance?

Modified life insurance allows the owner of the policy to pay lower premiums during the first several years of coverage (typically 2-10 years, depending on the insurer). The death benefit of the modified life insurance policy remains the same from the 1st day of coverage, but the cost of coverage is much cheaper in the beginning. Once the premium increases to the new amount, it typically stays the same (level) throughout the rest of the term.

In California, Modified Whole Life insurance is the most common type of modified life insurance.

You may want to consider modified life insurance in California if:

• You want to lock in the permanent life insurance coverage at a more affordable price while you are still young and you expect to be able to pay an increased premium, or
• You have medical issues that preclude you from getting other types of life insurance.

When considering modified life insurance, make sure that you can afford to maintain the payment once it increases to the full amount. Speak with a licensed California life insurance agent for further advice.

What Does Life Insurance Cover in California?

Life insurance coverage in California extends to all types of death, particularly those that come by natural causes or accidents. However, if you commit suicide within the first two years of your policy, your insurance may not cover such. Additionally, some California life insurance companies might exclude suicide entirely, but this must be clearly stated in the policy. The death benefits and payouts from a life insurance policy can be used for different purposes, including settling debts, paying for medical and burial expenses, providing a living income for your family, or for charity, etc.

Who Should Buy Life Insurance in California?

Due to its variety of uses that will follow you during your life, life insurance should be purchased by anyone who can afford to pay the premiums. The earlier you get it, the cheaper it will be.

You need to buy a life insurance policy if you are a breadwinner with loved ones who depend on your income for survival. Life insurance has benefits that you can enjoy while still alive and, at the same time, guarantee financial safety for your policy beneficiaries when you pass away. Life insurance is essential for everyone.

The process of deciding who should get life insurance in California is described in the following sections:

When Should I Get Life Insurance?

Typically, you should purchase life insurance in California if:

• You are young and healthy: Purchasing life insurance when you are young is smart because the cost of premiums tends to be cheaper. The older you get, the higher the premium. Young adults are considered people with low risks, so premium costs are less expensive. Premium goes up by 8%-10% every year, so lock it in early

• You have wards and domestic partners: Buying life insurance is essential, especially if you have children and a spouse that you would like to help out after your demise. Beneficiaries can use your policy death benefit to settle your children’s education, medical expenses, and other financial obligations - as they see fit. In 2022, it cost more than 300,000 to raise a child to the age of 17. The average cost of college education in California is over $20,000 per year.

• You want a life insurance retirement plan: Some forms of life insurance allow you to create an alternative retirement plan (similar to a 401K or a Roth IRA), where you can invest the cash value of the account into the stock market index to grow tax-deferred. The gains get locked in every year or so, and the losses, if the market takes a downturn, are limited and cannot drop your account balance below the last locked-in amount (also known as the 0% floor).

• You are a successful adult with high-net-worth properties: If you are a high-net-worth individual, purchasing a California life insurance policy could be a good way to settle these estate taxes and reduce the financial burden on beneficiaries upon your demise. If you have assets of over $5 million, you may qualify to use the life insurance premium finance option, where the premium is paid by the bank and the insured high-net-worth individual guarantees the repayment with their assets.

  Discuss life insurance premium finance strategy with an experienced California life insurance agent who is familiar with structuring such cases.

• You are a retiree with no substantial savings: Before retirement, most families use their income to sponsor their lifestyle. The implication is that they have little or no savings when they eventually retire and might not be able to cover any burial or death-related expenses. The longer we live, the more we must stretch our savings. By purchasing a simple life insurance policy, we guarantee that our family will not have to spend their money on the burial expenses and other debt after our death

Can You Get Life Insurance Policy On Anyone in California?

At first we must answer the questions: Who is eligible to take out a life insurance policy? You can only purchase life insurance for another person if you have a relationship with them and have an “insurable interest” in that person. In California, an insurable interest is proven if you receive some benefit (financial or other) that comes from the continued existence of the insured person. For example:

• A husband has an insurable interest in his wife and vice versa. Both of them have an insurable interest in their children and their own parents.
• A business has an insurable interest in the lives of its employees, management, and owners.

You must also inform the person and seek their consent before you begin the application process. This is because the person has to be involved in the process to answer certain questions, sign policy documents, or complete a medical examination as required by the insurer. 

Speak with a licensed local California life insurance agent to find out how to take out life insurance on someone else.

Who Can You Not Buy Life Insurance On in California?

In California, life insurance companies cannot let you buy insurance on anyone in whom you do not have insurable interest and/or who does not consent to the purchase.

Can You Have Multiple Life Insurance Policies?

Yes, you can have multiple life insurance policies in California. There are different types of life insurance policy coverages, and no law restricts anyone from purchasing multiple policies. You can buy different policies depending on your goals and preferences.

Discuss your life insurance needs with a California life insurance agent who is licensed to provide professional advice about the multiple life insurance policy options from competing CA life insurance companies.

Who Is the Owner of a Life Insurance Policy in California?

In California, a life insurance policy owner is the person who is protected by the policy and has the absolute right to make changes to it, gift the policy, and name beneficiaries. The life insurance policy owner is the same person whom the policy covers, and is committed to keeping it active through the payment of premiums. In some cases, the purchaser of a policy can name another person as the policy owner, such as the spouse, adult children, siblings, employer, or trusted business partner. That is, the buyer of the life insurance policy might be different from the insured. For example:

• Husband may be the owner of his wife’s life insurance policy and vice versa
• Business may be the owner of the Keyman life insurance policy, insuring it’s key employee’s life, or
• A Company that owns a life insurance policy on it employees and/or management is life insurance owner

How Can Life Insurance Work As An Investment In California?

Life insurance as an investment: Generally, life insurance is primarily for providing for your loved ones when you die. In a way you are investing into the ones you care about. However, California life insurance can also serve as a means of indirect investment.

Money wealth life insurance: Permanent life insurance policy (commonly known as the insurance for investments) allows you to build wealth through cash value account growth and compound interest. The growth is tax-deferred and in some cases guaranteed not to lose value, regardless of how the underlying market index performs that year. You can withdraw (and typically pay taxes) or borrow (tax-free) from the accrued cash value, which can also be used as an investment to create wealth based on the cost of the loan versus the possible returns elsewhere.

Due to certain built-in customer protections in life insurance, life insurance investment can be more stable than the traditional retirement schemes, such 401K, Roth-IRA, and others.

If you are looking for life insurance as an investment, seek the advice of a certified California financial professional investment advisor and a knowledgeable life insurance agent who can help you structure the policy according to your investment needs.

Using California life insurance as an investment is described in the following sections:

Is Life Insurance an Investment Vehicle?

You can use your California life insurance as an investment vehicle, but this is not life insurance’s primary purpose. The cash value components of permanent life insurance policies can provide tax-free money through loans that you can use for investment. Under this policy type, you can also accumulate money in your cash value account tax-deferred and can enjoy the dividends and interest that accrue from it.

Most common life insurance that is used as an investment vehicle in California is Indexed life insurance (Index Universal Life Insurance - IUL). Discuss your life insurance investment needs with a knowledgeable California insurance agent and a certified financial advisor.

What Life Insurance Pays Dividends in California?

Dividend life insurance: In California you can get dividends from a whole life insurance policy. The amount of policy dividends depends on the insurance company’s financial performance for that period. The payment of life insurance dividends can be:

• as a check,
• as additional paid-up death benefit, or
• as discounts on premiums.

Life insurance dividend you receive also depends on your insurance policy and premium cost. These dividends are typically not subject to federal and California state income tax, and you can choose to withdraw the cash dividends at any time you want.

Discuss life insurance dividend taxation with a certified California tax professional.

What is Joint Life Insurance?

Joint life insurance is colloquially known as couples life insurance, life insurance for couples, and dual life insurance.

California joint life insurance policy protects two different individuals under one policy. However, the insurance company only pays out death benefit once upon the death of either of the policyholders. Typically, spouses go for a joint life policy type to protect their kids well after their demise. It is an affordable policy as the two participants involved jointly pay the premium costs. Most life insurance companies in California offer two types of joint life insurance:

• First-to-Die Joint Life Insurance: Under this joint life policy type, the death benefit goes to the second policyholder upon the demise of the first.

  Most common type of Joint First-to-Die life insurance in California is First to Die Term Life Insurance (also known as: Group First-to-Die Term Life Insurance)

• Second-to-Die Life Insurance: This policy type is also known as survivor life insurance or survivorship life insurance because the death benefits go to beneficiaries after the demise of both policyholders. Both policyholders have to die before the beneficiaries (usually children) can get a payout.

  Second to Die life insurance is frequently used as life insurance for special needs children, where after the death of both parents the child can maintain the level of care needed.

Discuss joint life policy with a California-licensed life insurance agent. An agent will assess your needs and provide multiple joint life insurance quotes to choose from.

What is Credit Life Insurance?

California credit life insurance is a life insurance policy that helps the insured to pay off an outstanding debt left behind after death. Credit life insurance policy is typically tied to a specific loan, and the death benefit corresponds to the borrowed amount. As the loan principal reduces with time, the death benefit of the credit life policy and its cost goes down accordingly. This is referred to as the decreasing death benefit.

Credit life insurance guarantees to the lender that the loan will be repaid. And it guarantees to the insured that unpaid debt will not overburden their survivors in the event of the insured's untimely death. If your spouse is a co-signer on your mortgage, you could use credit life insurance to settle the loan payments, reducing the financial burden.

What is an Assignment in Life Insurance? 

Assignment in California life insurance refers to the process of transferring ownership of an insurance policy to another. An assignment of a life insurance policy may be a total assignment or part. You can assign your life insurance policy for different reasons, including as collateral for a business loan or as a gift.

Life insurance assignment in California is described in the following sections:

What Are The Two Types Of Assignment in Life Insurance?

In California, there are two main types of assignment in life insurance:

1. Absolute Assignment of life insurance
2. Conditional Assignment of life insurance

Absolute Assignment is the complete and irreversible transfer of the insured’s ownership right to another party. In this case, all rights and obligations under the policy are surrendered to the new party, including the duty of paying premiums and the decision on who become the policy beneficiaries

Conditional Assignment: This is a temporary surrender of the rights under the policy subject to specific conditions. Where these conditions are fulfilled, the ownership of the policy is reverted to the initial policyholder.

The best example of conditional assignment in California life insurance is when a business gets a business loan and uses life insurance as collateral to guarantee that the debt will be repaid if the applicant owner dies. Life insurance is required on SBA loans.

Once the protected loan is paid off, the assignment of the life insurance poliycy’s ownership is reverted to the insured, who can either keep the policy going or cancel it.

IMPORTANT: Do not cancel your life insurance policy without first discussing your decision with a California-licensed life insurance agent. If you have had this policy for a while, chances are that you will not be able to get other life insurance coverage at a better or even the same rate because now you are older and more expensive to insure.

When Does Life Insurance Mature?

California life insurance policy matures in one of three ways:

• when the policy expires,
• when the insured passes away, or
• when the insured outlives the maximum age of the permanent life insurance policy’s mortality table (typically 100-120 years old).

When a policy matures, the life insurance coverage expires, and the maturity value (if any as specified in the policy), will be disbursed to the insured. Insurance companies in California state the maturity value that will be disbursed upon death in the insurance policy documents.

Discuss life insurance maturity with a state-licensed CA life insurance agent.

The maturity of life insurance in California is described in the following sections:

What Life Insurance Policy Never Expires?

Some California cash value life insurance policies never expire; these are typically known as permanent life insurance policies. These life policies last until the death of insureds unless there is a policy lapse due to default in the payment of premiums. Some of these policy types include whole life insurance (also known as ordinary life, traditional life, straight life, and traditional permanent insurance) and some types of universal life insurance. These permanent policies do not expire and build up a cash value that can be accessed by the insured while still alive - as long as the premiums are paid to keep the policy active.

Does Life Insurance Pay For Suicidal Death in California?

Suicide and Life insurance: Most life insurance companies in California will not pay out the death benefit if the insured commits suicide within the first two years of the policy. However, if the suicidal death occurs at any other period, the company will be required to make payments. The 2 year waiting period is meant to stop people from buying insurance as part of suicide planning (also known as Life insurance suicide).

Life insurance suicide clause in California is described in the following sections:

Does Group Life Insurance Cover Suicidal Death?

Group life insurance policies in California typically treat suicide the same as the individually-purchased life insurance - a 2 year waiting period applies.

Some employer-provided group life insurance may pay out for suicidal death before the 2 year waiting period expires, but it is not guaranteed.

On average over 4,000 Californians die as the result of suicides every year. Suicide is preventable. Reach out for local help.

Is Life Insurance Worth it in California? 

Life insurance is worth it if it solves your needs:

• If your needs are to provide financial protection to your family in case of your sudden and unexpected death in the form of a tax-free lump sum payment - life insurance is worth it for you
• If you need the living benefit protections of the life insurance, in case if you suffer a terminal illness - life insurance is worth if for you
• If you need life insurance and its tax-deferred growth cash value as an alternative retirement plan - life insurance is worth it for you
• If you need to protect your business in case if a key employee or business partner passes away - life insurance is worth it for you

Speak with a licensed and experienced California life insurance agent to discuss the various possible uses of how life insurance can be worth it for you, by solving your needs.

How to Get a Life Insurance Policy in California? 

To get a life insurance policy in California, first decide on your financial goal, the type of life insurance that best meets your needs, and whether to pay premiums annually or in installments. Then, discuss your needs with a licensed and knowledgeable California life insurance agent to help you choose the suitable options based on your unique needs.

California life insurance quotes: To get started on a California life insurance quote you usually need to provide the following information:

• Name and contact details (phone, email)
• Birth date and year
• Gender
• Tobacco use
• Amount of desired face value of life insurance death benefit

Depending on the type of life insurance, the desired features, and the amount of requested death benefit you may be asked further questions about your health and possibly directed to a medical exam for the determination of the health rating. To get life insurance at the best price, you want to qualify for the best health rating possible.

Speak with a licensed California life insurance agent to:

• Help you find the coverage from the best life insurance companies in California that match your needs,
• Choose the best option among them, and to
• Help with the application process.

To check your life insurance agent’s credentials and companies they may represent, use the California life insurance license status inquiry.