10 Best Life Insurance Companies in Colorado

Strategically located in the western U.S., Colorado, the Centennial State, is bordered by Wyoming, Nebraska, Oklahoma, New Mexico, and Utah. As of 2022, it ranks as the 21st-most populous state with 5.7 million residents, while its vibrant capital, Denver, is home to 719,238 people.

According to the Center for Disease Control and Prevention (CDC), the average life expectancy in Colorado is approximately 78.3 years which is just under the national average life expectancy, which is currently around 79.05 years in the United States. Over the past few years, the leading causes of death in Colorado have been cancer, heart disease, and homicide. The homicide rate in Colorado is about 5.8 homicides per 100,000 residents, which is lower than the national average of 7.5.

According to the U.S. Bureau of Labor Statistics, in Colorado, the 90th percentile income is currently $119,010. The median income in the state is approximately $47,940. Most financial advisors recommend purchasing a life insurance policy that covers your loved ones for between 10X and 20X your annual earnings. In Colorado, this amounts to around $1,190,100 – $2,380,200 for most people.

How life insurance works in Colorado

Life insurance is typically straightforward and easy to understand. The way it works is that you pay a premium for a policy, and if you die during the term of the policy, your beneficiaries are paid a death benefit. This is typically a lump sum of money that is paid out to your loved ones. The money can be used for anything they see fit, including funeral expenses, debts, living expenses, or anything else.

To find out what life insurance plan and insurance agency is right for you, evaluate some life insurance quotes to see various insurance options before you sign up for any specific policy. Insurance products must be purchased through an agent, so you can use that time with an agent to ask questions and learn about life insurance.

There are two main types of life insurance products: term life insurance and whole life insurance. Term life insurance (or just term insurance) provides coverage for a specific period of time, usually 10-30 years. Once this term expires, so does your coverage. If you die during the term of the policy, your beneficiaries will receive the death benefit.

Whole life insurance, also known as universal life insurance or permanent life insurance, provides life insurance coverage for your entire life. As long as you continue to pay the premiums, your beneficiaries will receive the death benefit when you die. Whole life policies tend to be a bit more expensive, but they are also more flexible, and as long as you pay your premiums, you’ll never need to worry about your policy expiring.

For most people, term life insurance is the way to go. Term life insurance costs significantly less than whole life insurance and, while it does not build cash value like a whole life insurance policy, you can use the money you saved from paying cheaper premiums to invest in an investment account. It is also important to note whether your premium is a single premium or a flexible premium. If you’re not sure which type of life insurance is best for your situation, then it’s always best to speak with an independent insurance agent about your options.

How much life insurance do you need in Colorado?

The 90th percentile salary in Colorado is approximately $119,010 as of 2022. As mentioned, most financial advisors recommend that you purchase a life insurance policy that will cover your beneficiary for at least 10X – 20X your average annual income. In Colorado that works out to around $1,190,100 – $2,380,200. This amount will ensure that your loved ones can continue to pay their bills, settle your debts, and cover the cost of your final expenses.

You may also want to purchase additional life insurance to cover:

• Your mortgage (if you want your spouse and kids to be able to live in the home without worrying about mortgage payments)
• Children’s education costs (if you want your child’s education to be covered without any additional stress to your spouse)
• Bereavement therapy costs for your spouse and children (if you want them to spend time with a therapist after your unexpected death)
• Any other expenses that may be unique to your family or lifestyle

Colorado Life insurance laws

There are a few unique features with respect to Colorado Life Insurance Laws that have an impact on your specific policy if you are a resident of the state.

Here’s what you need to know:

• Free look period: This is the required time period in which a new policy owner can terminate the policy without any penalties. Colorado state law does not mandate a free look period for the insurance policies sold within the state. However, several insurers offer a reasonable period to their customers, usually between 7–30 days, to evaluate the policy and make a decision. 
• Grace period: This is the amount of time a policyholder has to pay a missing premium without paying a penalty. During this time, the insurance coverage remains active. For Colorado’s residents, the law mandates a 31-day grace period on their insurance policies. 
• Time period for claim settlement: Colorado laws do not specify a time limit for insurance companies to settle claims. However, the company is required to add interest payments to the total benefit, beginning from the date of death. Payments are typically made within a month. After 30 days have passed, the interest rate increases.
• Incontestability and contestable period: The contestable period is the amount of time an insurer can challenge any potentially fraudulent or misrepresented claims on the coverage application. After this period ends, the policy is usually considered incontestible. When a life insurance policy in Colorado has been in force for at least two years from the date of issue, it becomes incontestable.

In conclusion, life insurance is a type of insurance that helps financially protect your loved ones in the event of your death. It can give them the security and peace of mind they need to keep going in life, knowing that they won’t have the burden of financial worry on top of their grief. While no one likes to think about their own death, it is an important part of financial planning, and life insurance is a key part of that plan.

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