10 Best Life Insurance Companies in Illinois
Key Terms
- In Illinois, life insurance offers financial security for your family, typically recommended at 10X–20X annual income.
- Life insurance options include term, whole, and universal policies, each serving distinct needs and budgets.
- Unique Illinois laws impact life insurance policies, such as a 30-day grace period and a free-look cancellation within 10 days.
Strategically positioned in the north-central U.S., Illinois, known as the Prairie State, is bordered by Wisconsin, Indiana, Kentucky, and Iowa. With a population of 12.8 million, it stands as the 6th-most populous state, boasting Chicago as its dynamic largest city and Springfield as the capital.
According to the Center for Disease Control and Prevention (CDC), the average life expectancy in Illinois is approximately 76.8 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 Illinois have been heart disease, cancer, and homicide. The homicide rate in Illinois is around 11.2 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 Illinois, the 90th percentile income is currently $103,490. The median income in the state is approximately $46,630. Most financial advisors recommend acquiring a life insurance policy that covers your loved ones for between 10X and 20X your annual earnings. In Illinois, this amounts to around $1,034,900 – $2,069,800 for the majority of individuals.
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How life insurance works in Illinois
Life insurance is easy to understand. Basically, you pay a premium, and the insurance company promises to pay a lump sum to your beneficiaries if you die. It’s like most other types of insurance, in the sense that you are insuring against an unlikely but catastrophic event.
There are three main types of life insurance that you may want to consider: term life insurance, whole life insurance, and universal life insurance. Term life insurance pays a benefit to your beneficiaries if you die during the term of the policy. The term is typically 10, 20, or 30 years, and the benefit amount is fixed. If you die after the term expires, your beneficiaries do not receive anything.
Whole life insurance policies pays a benefit to your beneficiaries whenever you die, regardless of when that is. You pay a higher premium for whole life insurance than for term life insurance because the insurer knows that it will have to pay a benefit eventually. Whole life insurance also has a cash value that builds up over time, which means the life insurance policy is mixing investing and insurance. For most people, term life insurance is the way go.
Universal life insurance is another type of whole life insurance that has some flexibility built into it. With universal life insurance, you can adjust your premium up and down as needed, and you can also adjust the death benefit amount up or down without having to cancel and reapply for a new policy. Again, most people will want to purchase term life insurance.
When in doubt, your best bet will be to consult with an insurance company. A licensed insurance agent will be able to help you understand your options and find the best policy for your needs and budget.