10 Best Life Insurance Companies in Kentucky
Key Terms
- Life insurance in Kentucky offers vital financial protection, ensuring beneficiaries’ security after policyholder’s death.
- Whole life insurance combines permanent coverage with a cash value component, adding complexity and higher costs.
- Kentucky life insurance laws include consumer-friendly provisions like free look and grace periods for added flexibility.
Nestled in the eastern U.S., Kentucky, famously known as the Bluegrass State, is bordered by Indiana, Ohio, Virginia, West Virginia, Tennessee, and Illinois. With Louisville as its largest city and Frankfort as the capital, it ranks 26th in size and boasts a population of 4.46 million.
According to the Center for Disease Control and Prevention (CDC), the average life expectancy in Kentucky is approximately 73.5 years which is significantly 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 Kentucky have been heart disease, cancer, and homicide. The homicide rate in Kentucky is around 9.5 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 Kentucky, the 90th percentile income is currently $79,210. The median income in the state is approximately $37,660. Most financial advisors recommend acquiring a life insurance policy that covers your loved ones for between 10X and 20X your annual earnings. In Kentucky, this amounts to around $792,100 – $1,584,200 dollars for most people.
Life insurance coverage provides financial protection to policyholders’ beneficiaries in the event of the policyholder’s death. Life insurance policies shouldn’t be confused with annuities, which are financial product that provides regular payments to policyholders over a specified period of time. Life insurance products, such as term life and whole life insurance, provide death benefit protection to policyholders and their beneficiaries. Policyholders are individuals or organizations that have purchased insurance coverage and insurance agents are the professionals who sells insurance products on behalf of an insurance company.
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How life insurance works in Kentucky
Life insurance is one of the best ways that you can protect your loved ones when you pass away. The idea is pretty simple. You pay a monthly premium in exchange for a death benefit which is paid out to your beneficiaries when you die. That said, there are a few different types of life insurance policies.
Whole life insurance is one of the two main types of permanent life insurance (the other being term life insurance). Unlike term life insurance, which only covers you for a specific period of time, whole life insurance covers you for your entire life. This means that as long as you pay your premiums, your beneficiaries are guaranteed to receive your death benefit, no matter when you die. Because of this, whole life insurance is significantly more expensive.
Whole life insurance also has a cash value component. When you purchase a whole life insurance policy, part of your premium goes into a cash account that you can access while you’re alive. You can take out loans against the cash value of your policy or use it to pay your premiums if you run into financial difficulties. Whole life insurance mixes investing and insurance, making it a complicated product.
Term life insurance (also called term insurance) is a bit different. It’s a life insurance policy that only covers you for a specific period of time, typically 10, 20, or 30 years. If you die during that time frame, your beneficiaries will receive your death benefit. If you don’t die during that time frame, the policy expires, and your beneficiaries don’t receive anything. It’s insurance in its simplest form.
Universal life insurance is another option. Universal life insurance policies have a death benefit and a cash value component, like whole life insurance policies. However, the cash value component grows at a faster rate than it does with whole life insurance. This means that you can access your cash value sooner and use it for things like supplemental retirement income or to pay your premiums.
Most people will prefer and benefit from buying cheap term life insurance. You can get life insurance quotes for free online to compare different type of policies (use one of the links on our site to run instant quotes). Furthermore, there is lots of information on the Kentucky Department of Insurance at insurance.ky.gov