- Life Insurance covers the expenses that arise when somebody passes away.
- A good life insurance policy can cover your mortgage payments, your child’s education, and even therapy for your loved ones should you pass unexpectedly.
- Delaware life insurance companies can help you find a policy to suit your needs and budget.
Delaware is known as the First State and is located in the eastern United States. It’s bordered by Pennsylvania to the north, New Jersey to the east, and Maryland to the south and west. With a population of just over 967,000 people as of 2022, it’s the 45th-most populous state. The largest city in Delaware is Wilmington which has a population of 70,635 residents. The state capital is Dover which has a population of 38,079.
According to the Center for Disease Control and Prevention (CDC), the average life expectancy in Delaware is approximately 76.7 years which is lower than 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 Delaware have been heart disease, cancer, and Covid-19. The homicide rate in Delaware is around 9.9 homicides per 100,000 residents, which is higher than the national average of 7.5.
According to the U.S. Bureau of Labor Statistics, in Delaware, the 90th percentile income is currently $107,540. The median income in the state is approximately $46,700. Most financial advisors recommend purchasing a life insurance policy that covers your loved ones for between 10X and 20X your annual salary. In Delaware, this works out to around $1,075,400 – $2,150,800 dollars for most people.
How life insurance works in Delaware
The way life insurance works is that you pay a premium and in return your named beneficiaries receive a specified amount of money upon your death. There are many different types of life insurance policies, but one of the most common is called term life insurance.
With term life insurance, the premium is fixed for a specified period of time (the “term”). If you die during the term, your named beneficiaries will receive the death benefit. If you don’t die during the term, then no death benefit is paid out, and you lose the premiums you paid into.
Another type of life insurance is called whole life insurance. With whole life insurance (also known as universal life insurance), the premium is also fixed, but it is paid for your entire life. When you die, your named beneficiaries will receive the death benefit.
When purchasing life insurance, you must purchase through a life insurance agent (either a captive agent that works for a single life insurance company or an independent agent who can shop your case around multiple insurance companies). It is important to check life insurance agents NAIC code to ensure that they are properly liscenced and you should also keep in mind that life insurance products (like variable annuities) are not backed by the state of Delaware or any federal government agency.
The death benefit is meant to pay off your liabilities and to provide support to your beneficiaries in the event of a premature death, particularly to those people who rely on your income.
The main difference between whole life insurance and term life insurance is that with whole life insurance, you are guaranteed to receive the death benefit as long as you continue to pay the premium. With term life insurance, there is no death benefit if you live past the term of the policy. For those reasons, whole life insurance is much more expensive and also involves a complicated mix of insurance and investing. Most people are going to want to purchase simple term life insurance and use the extra money to invest in investment accounts.
Regardless of which type of life insurance policy you choose, it’s important to make sure that you name your beneficiaries correctly. If you do not name your beneficiaries correctly, the death benefit may not be paid out according to your wishes. You should also consult with a licensed insurance agent before signing any contract, as they can help you choose a policy that suits your needs and budget.
10 Biggest life insurance companies in Delaware
Delaware life insurance companies ranked by premiums written in the state.
|3||Mass Mutual Life Ins||$183,106,046||8.77%|
|7||Hartford Fire & Cas||$79,255,510||3.79%|
|8||Dai‐Ichi Life Holdings Inc||$79,193,190||3.79%|
How much life insurance do you need in Delaware?
The 90th percentile salary in Delaware is approximately $107,540. As mentioned, most financial advisors recommend that you purchase a life insurance policy that will cover your beneficiaries for at least 10X – 20X your average annual income. In Delaware that works out to around $1,075,400 – $2,150,800. 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
Delaware life insurance laws
There are a few unique features with respect to Delaware 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:
- 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. Insurers must give Delaware’s policyholders a grace period of at least 30 days, or four weeks if it’s an industrial life insurance plan.
- Time period for claims settlement: In the event of a life insurance claim in Delaware, the policyholder’s insurance provider must pay the claim to the beneficiary within 60 days of obtaining evidence of death. Failure to make timely and fair payments may result in the insurer facing fines or penalties.
- Incontestability: A life insurance policy in Delaware becomes incontestable if it remains active for at least two years after its date of issue. The company cannot challenge the application for any inaccuracies or discrepancies after this two-year period. The exceptions are only for policies with pending premiums or if the policyholder is eligible for accidental death benefits.
While no one likes to think about their own death, it’s important to have a life insurance policy in place in case the unthinkable happens. A life insurance policy can give you and your loved one’s peace of mind, knowing that the finances will be taken care of in the event of your death. If you’re not sure how much life insurance you need, a good rule of thumb is to purchase a policy that is worth 10 – 20 times your annual salary. This will ensure that your loved ones have the financial means to pay for your end-of-life costs and manage their own expenses moving forward.
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Joshua Holt is a licensed insurance agent (License #2785989) and founder of Biglaw Investor and Sidebar Insurance LLC, an insurance agency created by lawyers, for lawyers. His insurance expertise lies in the areas of life and disability insurance, particularly covering lawyers, doctors and other high-income professionals. Prior to Biglaw Investor, Josh practiced private equity mergers & acquisition law for one of the largest law firms in the country.