10 Best Life Insurance Companies in Washington
Key Terms
- Life insurance in Washington offers a financial safety net, crucial for high-income earners and their families.
- Choosing between term and whole life policies depends on coverage needs and financial goals, with significant differences in duration and benefits.
- Washington residents should understand specific state laws, like the contestable period and Guaranty Association protections.
In the northwestern U.S., Washington, the Evergreen State, is bordered by Idaho and Oregon and boasts a population of 7.53 million, making it the 13th-most populous state. With Seattle as its largest city and Olympia as the capital, Washington’s vibrant urban centers are a magnet for high-income professionals.
According to the Centers for Disease Control and Prevention (CDC), the average life expectancy in Washington is approximately 79.2 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 Washington have been cancer, heart disease, and accidental fatalities. The homicide rate in Washington is about 4.2 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 Washington, the 90th percentile income is currently $127,470. The median income in the state is roughly $50,450. Most financial advisors recommend acquiring a life insurance policy that covers your loved ones for between 10X and 20X your annual earnings. In Washington, this amounts to around $1,274,700 – $2,549,400 for most affluent earners.
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How life insurance works in Washington
In simple terms, life insurance is a contract between you and an insurance company, where you pay a certain amount of money each month, also known as a premium like you pay with auto insurance, to receive a death benefit. 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 in annuities. However, this money needs to be paid back, or your death benefit will shrink.
There are two main kinds of life insurance: term life insurance and whole life. Term 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. Whole 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. Whole life insurance mixes investing and insurance to achieve these results and, therefore, is usually not a good choice.
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.