If you are planning on purchasing a life insurance policy in the state of California, there are some things you should know about. The highest populated state in the country also has a high number of insurance rules and regulations that you should be aware of. By familiarizing yourself with the way life insurance works in the state of California, you will be properly equipped to make informed decisions when it comes to investing in a life insurance policy.
What are the rules and regulations regarding life insurance in California? Will you be compensated if your life insurance company goes out of business? What are the best companies to buy life insurance from in California? Continue reading below to learn everything you need to know about life insurance in California.
Table of Contents:
- Life Insurance Rights and Regulations in California
- California State Guarantee Association
- The Top 10 Life Insurance Companies in California
Life Insurance Rights and Regulations in the Golden State
The California Insurance Code regulates the life insurance industry in the state of California. The California Department of Insurance also provides additional consumer protection. Under the California Insurance Code and the mandates set forth by the California Department of Insurance, you can rest assured knowing that you, the consumer, is protected and in good hands. Let’s take a look at some of the important things to know:
Free Look Period In California
All consumers who purchase a life insurance policy are given ten days to change their mind. Within these ten days of purchasing the insurance policy, the consumer is has the right to cancel his/her coverage and get a full refund for any amount paid on the policy. This, known as the “free look” period, allows the consumer to back out of their policy if he or she is not satisfied.
California Grace Period
In California, if you miss payment on your premium, the law gives you 30 days to make up for it before they cancel your policy. This ensures that you will not be penalized (i.e. have your policy canceled) unreasonably. The California Insurance Code dictates all licensed insurance companies offer a 30-day payment grace period.
Timely Payment On Claims
In addition to a 30 day grace period, California life insurance companies must pay all claims within 30 days of receiving proof of death. This means that the beneficiaries of all life insurance policies written in the state of California are required to make timely payments. In the event of late payment, the beneficiary will collect interest and the insurer will accrue penalties.
California State Guarantee Association
If the insurer who wrote your life insurance policy somehow goes out of business, the California Life & Health Insurance Guarantee Association will help compensate you. The full amount of your policy may not be insured, but the organization does promise to compensate you for up to $100,000 in lost cash and $250,000 in death benefits. In order to collect this money in the event your life insurance company goes out of business, you must be up-to-date on your life insurance payments, and your insurance company must be properly licensed to operate in the state of California.
The California Life & Health Insurance Guarantee Association can be reached at:
10780 Santa Monica Boulevard, Suite 401
Los Angeles, CA 90025
The California Department of Insurance can be reached at:
California Department of Insurance
Telephone: 800-927-HELP (4357)
10 Best Life Insurance Companies in California
1) New York Life
New York Life is the largest life insurance company in California. In 2018, New York Life had 8.44% of the market share in California. New York Life has been serving people for 175 years. Offering four types of life insurance, New York Life takes care of its customers. The four types include term life insurance, whole life insurance, universal life insurance, and variable universal life insurance. One of the best features available to California residents is the ability to design a plan tailored directly to your needs. This ability is why so many Californians choose New York Life for their life insurance needs.
Transamerica is the second-largest life insurance company in California. In 2018, Transamerica had 7% of the market share in California. Founded in 1904, Transamerica offers five different life insurance types, including term, whole, universal, index universal, and final expense life insurance. The index universal life insurance allows you to accrue cash value over time while receiving traditional death benefits. It is multi-purpose protection provided to Californians, which is one reason Transamerica is the second-largest life insurance company in California.
3) Northwestern Mutual
The best insurance company in California to purchase a whole life insurance policy is Northwestern Mutual. With customizable options, Northwestern Mutual will assign you an insurance expert to help you make the best options for you, so your loved ones will receive the most benefits possible. If you want your child to go to college or your spouse not to work after you pass, they can plan this into your whole life insurance policy. They keep the end goal in mind and will help you meet financial goals. This customizable coverage is why Northwestern Mutual is one of the best life insurance companies in California.
4) Lincoln National
If you are a young smoker, the best insurance company for you is Lincoln National. Once you hit 55, Lincoln National has higher rates for smokers than some of the other top insurance companies. Offering 10, 15, 20, and 30-year term life insurance, Lincoln National provides a few additional benefits with their insurance policies. The first benefit is the conversion option and the accelerated death benefit. If the policy owner is diagnosed with a terminal illness and given 12 months or less to live, Lincoln National will allow you to withdraw a percentage of the benefit early. These extra features are why Lincoln National is one of the best life insurance companies in California.
One of the country’s oldest life insurance companies, Prudential specializes in universal life insurance and term life insurance. Founded in 1873, they aim to produce long-term value for their customers and stockholders. They are a financially sound life insurance company with billions. They have no problem paying out benefits to ensure your family is taken care of. Much like Lincoln National, they offer the conversion option and accelerated death benefits. Another feature they provide is MediGuide Medical Second Opinion, which provides services should the policyholder be diagnosed with a life-threatening illness or disease. Prudential has been around for so long; they know how to provide excellent customer service and are among the best life insurance companies.
6) Mass Mutual
If you are looking for an inexpensive term life insurance policy, Mass Mutual can help you out. They offer the lowest price on term life insurance policies in California. Apply online and get help estimating how much coverage you will need. When your term ends, you can save money by transferring to a whole life insurance policy. Mass Mutual is a great life insurance company because of its low prices on term life insurance.
7) Mutual of Omaha
If you have done much research on purchasing an insurance policy, you should have noticed that most companies require you to have a medical exam before they insure you. Mutual of Omaha does not require this medical exam. You can apply for whole life insurance online and get approval in just a few hours. Because they do not require an exam, their maximum payout is $25,000. They have limited benefits. Mutual of Omaha is an excellent company for those who have a chronic illness and can’t work as their premiums are low.
Along the same lines as Mutual of Omaha, some customers do not need a comprehensive medical exam. Haven Life offers life insurance policies from $100,000-$3,000,000. They offer new policies to 26 to 64-year-olds. You can get a free quote online, and their policies are incredibly affordable. Haven Life does not provide customizable policies or the ability to add riders. However, Haven Life is one of California’s best life insurance companies because it is affordable, and some applicants do not have to have a medical exam.
9) Bestow Life
Bestow Life has a straightforward application process. It is part of Bestow Life’s mission to make purchasing life insurance more precise and more convenient. If you are over the age of 55, you should look into other insurance companies. Also, Bestow Life is not the ideal provider for permanent life insurance. However, some policies are as low as $8/month. The max coverage Bestow Life offers is $1,000,000. Bestow Life is one of California’s best insurance companies because the application process takes less than 10 minutes and is provided for 21 to 54-year-olds.
The final life insurance company that is one of the best in California is Allstate. Allstate is excellent when it comes to bundling. As one of the country’s largest insurance providers, they give discounts when insurance policies are bundled together. You can bundle your car, home, and life insurance for one low price. Allstate has a $250,000 term life insurance policy for as little as $25 a month. They also offer four different policy types for life insurance. They offer term, whole, universal, and variable universal life insurance. Allstate’s bundle savings makes it one of the best life insurance companies in California.