Best Life Insurance Companies in Columbia, MD

FAQs

• Will your life insurance policy pay for your Columbia home’s mortgage balance in case you pass away unexpectedly?

  Yes, including the amount of mortgage you still owe in the life insurance policy you purchase in Columbia is one way to ensure your mortgage balance is paid by your policy. This way, your beneficiaries will have money to cover your final expenses, such as burial costs and the mortgage on your home. Alternatively, unlike life insurance, which can cover your beneficiaries' other financial needs, you can take out separate mortgage protection insurance that will only address your mortgage balance.

• Can your insurer automatically cancel your life insurance policy in Columbia if you missed one payment?

  No, policyholders in Columbia are entitled to a 30-day grace period following a missed premium payment under Title 31 of the Maryland Code of Regulations. During this time, the insurance company is not permitted to cancel your policy or withdraw coverage. This grace period allows you to pay the missed premium without jeopardizing your policy.

• Who has the right to take out a life insurance policy on your life in Columbia?

  Only people with an insurable interest or a substantial economic interest can buy life insurance on your life in Columbia. Blood relation or substantial love or affection generates insurable interest. So you, your blood relatives, and your spouse can all purchase a life insurance policy. Parties with substantial economic interest are those who would suffer a financial loss if you died, such as your business partner.

• Which death situations are commonly excluded from life insurance policies in Columbia?

  Suicide is not covered by almost all life insurance policies. Deaths caused by acts of war, military service, and aviation accidents are also common exclusions in Columbia. Some insurance companies also exclude deaths caused by dangerous activities such as skydiving and illegal activities such as DUI. Meanwhile, some life insurance policies only cover accidental deaths and do not cover illnesses.

• Will your beneficiaries receive the full cash value of your life insurance policy after you pass away in Columbia?

  No, even if the cash value of your policy exceeds the death benefit, your beneficiaries will only receive the death benefit specified on the policy. However, there are some whole life insurance providers in Columbia who will provide you with both a death benefit and cash value. Make certain to clarify this point before signing the insurance contract. It is important to note that any unpaid loans made against your policy will be deducted from your beneficiaries' payout.

• 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.