Best Life Insurance Companies in Washington DC

Frequently Asked Questions

• 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.