While no one can truly plan for death, you can prepare as much as possible. An Arizona life insurance policy helps cover necessary expenses so your loved ones don’t have to worry so much when they are grieving. Here are some things you should know when deciding what type of life insurance coverage to get in Arizona. 

What Is Arizona Life Insurance? 

Getting a life insurance policy in Arizona means signing a contract with an insurance company that agrees you will pay a premium for a death benefit. The death benefit reduces your loved ones’ financial risk and provides them with money for necessary end-of-life expenses, including funeral costs, medical bills, and outstanding debts. 

Life insurance policy amounts vary, so it’s essential to know which kind you need before you purchase one. Regardless of what type you choose, its purpose is to lower your loved ones’ financial burden and stress if you die while the policy is active. 

What Kinds of Life Insurance Policies Can You Get in Arizona? 

The two main types of Arizona life insurance are term life and permanent life.  Both contain other kinds of insurance that cater more specifically to your coverage needs. Neither is a better option than the other, but they do involve different risks and benefits.  In Arizona, we have six life insurance you can choose from:  

1. Term Life Insurance 

Term life insurance sets a time limit for your policy and covers you for a specified number of years. For most people, this term is between 20 and 30 years, though it varies based on your policy and provider. If you die outside the time limit, your loved ones won’t receive a death benefit. There are three types of term life policies: 

• Level term: With this type, your premium amount stays the same for as long as you have the policy. Usually, you can’t buy level term policies if the term expires after your 80th birthday. 
• Decreasing term: This is a renewable policy, but your death benefit decreases as you age at a rate determined by the insurer. 
• Renewable term: Renewable term life insurance is more flexible than other policies. It continues after age 80 and has terms that let you renew or purchase it again. It comes with higher premiums as you age but still pays out the agreed upon death benefit regardless. 

Often, you can renew your Arizona term life insurance policy, and some providers let you modify or update your policy if you do. However, your insurer will also change the policy at this time to reflect the risk to them. The younger you are, the cheaper your policy. 

Term life insurance is less expensive than permanent life policies because it doesn’t build cash value or provide anything more than the death benefit when the time comes. Men typically pay higher premiums than women, and smokers pay significantly higher premiums than nonsmokers. 

Factors like these and other health-related variables mean that two people with a policy for the same death benefit will likely not pay the same premium, as many of these factors are unique to the policy owner. 

2. Permanent Life Insurance 

With permanent life insurance in Arizona, your coverage lasts until your death. These policies also build cash value through dividends that can increase your death benefit beyond the minimum amount agreed in your contract. Permanent life insurance comes with higher premiums and has many more options than term life insurance. 

3. Whole Life Insurance 

Whole life is the most common type of life insurance. It comes with fixed premiums and a death benefit for the entire life of the policy. It also earns interest at a set rate, making it more stable than other policies. On the other hand, this makes it less flexible than variable and universal life insurance policies in Arizona. 

4. Variable Life Insurance 

With variable life insurance, you pay a fixed premium and invest that premium in a portfolio of stocks and bonds. Your policy’s death benefit and cash value depend on how well your investments do over time. 

Variable life insurance is a riskier policy type. If your investment does poorly, your loved one receive a lower payout later. That’s why this policy sometimes has a guaranteed minimum payout to mitigate the risk. 

5. Universal Life Insurance 

Universal life insurance is one of the most flexible Arizona life insurance plans you can get due to its adjustable premiums. You can pay higher premiums when you have the money to do so and lower ones when you have less to spare. 

Universal life policies have a cost of insurance (COI) that dictates the minimum amount you must pay to keep your policy. Otherwise, you can pay as much or as little as you want. You can also change your death benefit amount as needed. 

6. Variable Universal Life Insurance 

With variable universal life insurance in Arizona, you get the advantage of flexible premiums and the opportunity to invest them. These policies offer the most flexibility but can be too much for some people. They work better if you can handle a higher risk for a potentially larger death benefit. 

How Do You Know Which Coverage Type Is Best for You? 

The type of Arizona life insurance you get depends on when you purchase it and your reasons for buying life insurance. If you need low premiums or have young children and are only getting life insurance as a precaution, term life insurance may be enough. A permanent policy gives you more security if you plan to keep it when you’re older or purchase a policy later in life. 

Working with an insurance agent can help you determine the right policy for you. As you explore your options, consider your health, your level of risk, premium costs, flexibility, and other personal factors that may affect your coverage. 

Get Affordable Life Insurance in Arizona 

Find the cheapest life insurance in Arizona with Oasis. Learn how we can help you get the right policy for you and your loved ones when you get a quote for life insurance online, call (880) 330-5190, or visit one of our locations.