Best Life Insurance Companies in Washington DC

FAQs

• Does universal life insurance in Washington D.C. accumulate cash value?

  Yes, universal life insurance policies in Washington, DC, can accumulate cash value. The funds in universal life insurance earn interest either through the policy's minimum interest rate or the current state of the market, whichever is higher. Policy owners have the option to use part of the accumulated cash value in the form of loans or withdrawals.

• Is suicide covered in life insurance plans in Washington D.C.?

  Every life insurance company in Washington D.C. has a death by suicide exclusion, which is typically a two-year clause. In the event a policy owner dies by suicide within two years of taking out the policy, then his/her beneficiaries will not be able to collect any death benefits. Some life insurance providers only return the premiums to the beneficiaries and not the benefits. Insurance companies follow this clause to prevent individuals who are planning to commit suicide from purchasing life insurance. Most companies even screen people for mental health conditions before approving their life insurance applications.

• What is the difference between term and permanent life insurance plans in Washington D.C.?

  There are two main types of life insurance in Washington D.C.: term and permanent. Term life insurance covers individuals for a specific period of time, ranging between 10 and 30 years. It pays out a certain lump sum to a beneficiary if the policy owner dies. On the other hand, permanent life insurance offers protection for life as long as the policy owner continuously pays for their premiums in full. It accumulates cash value, which the policy owner may use later in life.

• Can you get life insurance in Washington D.C. if you smoke or ingest marijuana?

  Yes, you can get life insurance in Washington, DC, even if you smoke or ingest marijuana. In the District of Columbia, the use of recreational marijuana has already been legalized. Some insurance companies charge marijuana users the same rate as cigarette smokers, while others offer standard non-tobacco rates for those who consume marijuana for recreational use only.

• Can you use the cash value portion of your life insurance plan in Washington D.C. for tax diversification?

  Yes, you can use the cash value portion of your life insurance plan in Washington, DC, for tax diversification. The accumulated fund value in your life insurance plan can be taken out as loans. A lot of affluent investors have already been using the cash value of their insurance to diversify their portfolio, including their taxes. If done and managed correctly, these can be forgiven at death under the current tax code.

• Which is better, term or whole life insurance?

  Life insurance is a personal financial tool, so the right type of insurance for you depends on your goals and current situation. One of the main differences between term life insurance and whole life insurance is that term life insurance only covers you for a set period of time. Once you meet the premium payment requirements on a whole life plan, it covers you for the rest of your life. Whole life insurance also builds cash value, making it a potential investment. But whole life insurance is typically much more expensive than term life insurance.

• How much life insurance do I need?

  A common recommendation is purchasing life insurance that is equal to five times your current salary, or more. But you can also estimate how much life insurance you need by adding up your debts, annual expenses for dependents multiplied by the years you want to ensure support, and any other items you wish to cover, such as a future wedding or college tuition.

• How does life insurance work?

  The details of how life insurance works depend on your individual plan, but the basics are as follows: 

  • You pay a premium to purchase the insurance. Typically the premium is paid monthly, but it could be rolled into quarterly, bi-annual, or annual payments. 
  • As long as you are meeting or have met premium obligations, if you pass away, the insurance company makes the agreed-upon payment to the beneficiaries you designated. 
  • Beneficiaries usually have to provide the insurance company with a death certificate to receive their payments.

• How much is life insurance?

  The cost of life insurance ranges widely. Term life insurance can cost as little as a few dollars a day, and whole life insurance can cost thousands per month on the high end. Factors that impact the cost of your life insurance include whether you're choosing term life insurance or whole life insurance, your age, how much coverage you want, your overall health, and your gender.

• Is life insurance taxable?

  Life insurance proceeds are the funds paid via your plan to your beneficiaries if you pass away. These are also called death benefits. Typically, these are not considered income for taxes. If you take out cash value from a whole life insurance investment and the amount exceeds how much you paid in premiums, the difference may be considered taxable income.

  
  

• Can I buy health insurance that is not Obamacare?

  When people say "Obamacare insurance," they typically mean insurance within the health insurance marketplace. You can get health insurance outside of the marketplace by going through your employer, choosing COBRA coverage if you leave your job, or buying a short-term health insurance policy through an insurance agent. ACA-compliant plans meet all the benefits and coverage requirements of the Affordable Care Act. But you may be able to find supplemental or short-term coverage that simply provides peace of mind for major medical expenses.

• Can I buy health insurance anytime?

  To buy health insurance in the marketplace, you must purchase it within open or special enrollment periods. But you can purchase short-term coverage to bridge the gap between now and the next open enrollment period. These plans are meant to be used for less than a year. You can purchase them online or via insurance agents, but they may not be ACA-compliant.

• Who should buy supplemental health insurance?

  Supplemental health insurance is a product that helps cover the cost of services that your primary health insurance policy doesn't. One popular option is secondary insurance that helps cover some of the costs associated with high deductibles. Medicare supplemental insurance is also popular. Medicare doesn't cover everything, and older adults on a limited income can face large prescription or medical bills after Medicare pays. Supplemental insurance helps reduce those patient costs.