10 Best Life Insurance Companies in Minnesota
Key Terms
- Life insurance is essential in Minnesota for providing financial security and covering debts for your beneficiaries.
- Options include term and whole life insurance, with coverage recommended at 10-20 times your annual income.
- Unique Minnesota regulations affect policies with details on grace periods and claim settlement processes.
Strategically positioned in the northern U.S., Minnesota, the North Star State, shares borders with Wisconsin, Iowa, and the Dakotas. With a population of 5.6 million, it ranks 22nd in size, featuring Minneapolis as its largest city and Saint Paul as the capital.
According to the Center for Disease Control and Prevention (CDC), the average life expectancy in Minnesota is approximately 79.1 years which aligns with 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 Minnesota have been cancer, heart disease, and homicide. The homicide rate in Minnesota is about 3.6 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 Minnesota, the 90th percentile income is currently $101,980. The median income in the state is roughly $47,590. Most financial advisors recommend obtaining a life insurance policy that covers your household for between 10X and 20X your annual earnings. In Minnesota, this amounts to around $1,019,800 – $2,039,600 dollars for most individuals.
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How life insurance works in Minnesota
In simple terms, life insurance is a contract between you and an insurance company, where you pay a certain amount of money each month to receive a death benefit. Just like other types of insurance (like health insurance), if you meet the eligibility requirements you can get either a group insurance policy or an individual policy. You are covered for a set amount in the event of your death, usually paid to a beneficiary of your choosing. Depending on your policy, it may also be possible to borrow money against your death benefit’s cash value. However, this money needs to be paid back, or your life insurance benefit will shrink.
There are two main kinds of life insurance: term and whole life. Term life insurance is very straightforward: it lasts for a set period of time, such as 20 years. If you die during that time, your beneficiaries get the death benefit. If you live beyond the term, the policy expires. Whole life insurance (also known as universal life or variable life insurance), on the other hand, is permanent. You pay a set amount every month until you die. Upon your passing, the death benefit will be paid out to your designated beneficiary. Because of this, whole life insurance is much more expensive.
Life insurance is a valuable tool for anyone who has a family to support, anyone who is financially responsible for someone else’s care, or anyone who has outstanding debt that needs to be paid off after death. If you are the sole financial provider for your family, life insurance can help provide the financial support your loved ones need in the event of your death. It can pay off any existing debt you may have, such as a mortgage or student loans, or it can help with everyday expenses such as your children’s education or your spouse’s day-to-day expenses.
It is important to talk about your insurance needs with an insurance agent so you can learn about various insurance products.