The beginner’s guide to life insurance in Virginia

If you or your spouse passed away, would your children and loved ones be able to manage financially without you?

That’s a tough question to think about, but a life insurance policy can make answering it much easier.

What is life insurance?

Life insurance is a contract between you and an insurance company that guarantees the insurer will pay a certain amount of money to your loved ones – called beneficiaries – upon your death. The policyholder must pay the insurer regular premiums over their life to honor their contract with the insurer.

Life insurance policies offer tax-free death benefits for your beneficiaries upon your death, and some types of policies include living benefits for policyholders.

As of 2021, Virginia families and businesses receive $38.3 million in life insurance annuities each day.

Most people get life insurance when they have kids to ensure that their children have financial security.

Why should I have life insurance?

There are so many reasons to have life insurance. Here are the most common reasons why people have life insurance:

  1. You have children and a spouse who is a stay-at-home parent. If you were to pass away, your life insurance could help them remain in the home and even help pay for college for your kids when they get older.
  2. You have a spouse who doesn’t work and takes care of the household. Your life insurance money would help ensure they can maintain their quality of life if you passed away unexpectedly.
  3. You are the primary caregiver of one or both of your elderly parents. If you were to pass away, the life insurance money would help ensure they continue to receive care.

Before you talk to your agent about getting life insurance, you might want to sit down and think about what you would want your life insurance to do for your loved ones. Think about how much they would need to keep the house, send the kids to college, or maintain a good quality of life. Think about how much money your loved ones would need for your funeral and any other arrangements you would want.

Understand Virginia life insurance options

It can get confusing because there are many different types of life insurance, but that’s for a reason. Before you talk to your agent, you may want to become familiar with the basic types of life insurance and how they work. If you’re really not sure, your agent can help you decide which type of policy is right for you based on your reasons for wanting life insurance (such as getting the kids through college if you pass away before that time comes.)

Permanent life insurance

Permanent life insurance policies offer lifelong coverage and won’t expire as long as you remain current on your premium payments.

Permanent policies also serve as a savings tool because they can accumulate cash value over the course of the policy. This allows you to accumulate tax-deferred savings, receive tax-free dividends, and tax-free death benefits. Policyholders can also borrow money from the cash value of their permanent life insurance policy to cover expenses later in life.

Popular types of permanent life insurance policies include:

Whole life policies have death benefits and premiums that stay the same throughout the policy. The cash value of the policy grows at a guaranteed rate.

Universal or adjustable policies may allow policyholders to adjust their premium payments and death benefits.

Variable policies offer a death benefit and a savings component you can grow with investments, meaning your cash value may grow faster or decrease depending on market conditions.

Variable universal policies give policyholders options to invest their life insurance savings and the option to adjust premiums and death benefits.

Burial insurance offers a smaller death benefit that’s often used to cover funeral costs and end-of-life expenses.

Term life insurance

Term life insurance lasts for a specific period of time and provides death benefits if the policyholder dies before the term of the policy expires. Terms are usually 10, 15, 20, or 30 years.  

Term life insurance policies are the most popular type of life insurance option because they’re affordable and offer easy-to-understand benefits. Policyholders can have insurance coverage for certain stages of their lives, such as parents with young children who depend on them financially.

Types of term life insurance policies include:

Level term policies have a stable death benefit and premium over the course of the term.

Decreasing term policies feature a death benefit that drops in value over time.

Renewable term policies guarantee that policyholders can renew their policy at the end of the term as long as they pay their premiums.

Convertible term policies allow policyholders to switch to a permanent life insurance policy once their term expires.

Choosing the right life insurance plan depends on what you want it to do for your loved ones. Some people use life insurance to make sure their kids can go to college.

How to choose the right life insurance plan for you

Your life insurance policy should offer enough coverage to protect your loved ones from suffering significant financial losses upon your death, but should also have premiums you can comfortably afford to pay.

Picking the right type of life insurance plan

Term life insurance policies are less expensive than permanent policies. Although term life insurance policies will expire if you outlive the term, these policies are often useful for people who want life insurance for a certain stage of life.

However, term life insurance premiums increase as you age. If your term policy expires and you still want life insurance coverage, you’ll pay higher premiums to maintain the same level of coverage.

Permanent life insurance policies, although they’re more expensive than term policies for younger people, help you grow your wealth over time and leave money to your loved ones regardless of when you die. The cash value of a permanent life insurance policy can also come in handy later in life if you need to fund a large purchase or lower your premium payments.

You’ll need to repay any loans you take out with interest, otherwise, the death benefit to your beneficiaries will decrease. If you decide to surrender your permanent life insurance plan, you can convert the value of the policy into an annuity for extra income during retirement.

Picking the right amount of life insurance coverage

To determine the amount of life insurance coverage you need, sit down and calculate your income and compare it with your dependents’ existing and anticipated expenses.

There should be enough coverage for your loved ones to cover their expenses long enough to find a way to replace your income. Remember that your family may need to pay funeral expenses, estate taxes, and for your end-of-life care once you pass away.    

One general rule is to multiply your annual income by 10. Your insurance coverage should be around that amount to comfortably meet your loved ones’ needs.

To make sure you get enough coverage, think about how much money your loved ones would need to maintain a similar quality of life. How much would they need to pay the mortgage and daily living expenses? How much would it cost to send your kids to college, or your elderly parents into a care facility?

How much does life insurance cost?

Life insurance policies are often more affordable than people expect them to be, but there are still costs associated with any policy. Premiums vary widely – from a few dollars a month to a few hundred.

Life insurance premiums are based on several factors, including the type of policy, the amount of benefits, your age, gender, smoking history, health issues, lifestyle factors, family medical history, and driving record.

Term life insurance is usually less expensive than permanent life insurance policies, but term life insurance policies do not offer a savings component to grow the value of the policy.

Also know that younger life insurance policyholders can typically find the best rates, while older policyholders should expect to pay higher premiums.

Can I get discounts on life insurance?

Always shop around for life insurance and compare premiums offered by several providers. Or better yet, contact your local independent agent to do the shopping around for you. Insurance companies base their premiums on a variety of factors, and insurers may prioritize some factors differently when setting their prices.

Other ways to save on life insurance include:

•Opting into group insurance policies offered by employers and organizations

•Pay attention to how often you pay your premium. Some insurers charge more for paying premiums more frequently.

•Maintain or improve your health. Staying healthy increases your life expectancy and can make life insurance more affordable. If you had a previous medical condition that later improved, ask your insurer for a rate re-evaluation.

•Applying for life insurance when you’re young and healthy.

Applying for life insurance while you’re young and healthy can help ensure your premiums remain low throughout your life.

Life insurance FAQs

I’m overwhelmed by the options. How do I know what life insurance is best for me?

It’s common to be overwhelmed by the options. It might seem confusing, but the variety of options is there because different people have largely different reasons why they want life insurance in the first place. Some people use life insurance as financial security for their loved ones after they pass, or to help pay for their kids’ college if their spouse ends up a single parent. Others look at life insurance as a type of “personal bank,” or way to store cash for themselves later in life. Some people even have life insurance in order to accrue cash value so they can take out large loans on the policy in the future.

Before you look at the different types of policies, think about why you want life insurance in the first place. Pick the best type of policy to fit that goal. If you’re still not sure, tell your agent about your goals and they can recommend the best type for you.

Can I get life insurance if I have a medical condition?

People with serious medical conditions may have a harder time qualifying for some life insurance policies, but there are many life insurance options available and some policies do not require you to pass or even undergo a medical exam to receive coverage.

An experienced life insurance provider can work with you to find the best plan to meet your needs.

How do I choose my beneficiary?

The beneficiary of a life insurance policy is the only person able to claim the death benefit once the policyholder passes away. There can be multiple beneficiaries for one life insurance policy. Beneficiaries are usually people who depend on the policyholder financially. Beneficiaries can also be nonprofits or other organizations.

You can also work with an attorney to create a revocable living trust and naming the trust as your beneficiary. This ensures that the death benefit gets used according to your exact wishes. We highly recommend using your life insurance in conjunction with your legal will so there is absolutely no question where the money belongs after you die.

What if I change my mind about life insurance?

Virginia’s “free look” provision requires that life insurance policies issued in Virginia need to contain a provision that allows a policyholder to return their life insurance policy within the first 10 days of receiving it. This protects you in case you decide you no longer want the life insurance policy you signed up for.

How do beneficiaries receive the death benefit?

Your beneficiaries should contact the insurance company as soon as possible to begin the claims process. A beneficiary will need to submit a certified copy of the death certificate to the insurance company. There may be other documents and paperwork to complete before receiving the death benefit, but claims are typically paid within 30 days.

Do I have to be married for my partner to receive the life insurance money?

No, you can name anyone (including a nonprofit or a business) as a life insurance beneficiary. Most people assign the benefit to their children, spouse, or same-sex partner. Just be sure the beneficiary is the same on your legal will (if you have one). You can also split the money between multiple beneficiaries.

How do I know the insurance company won’t deny the claim?

You occasionally hear stories of people trying to commit fraud and the life insurance claim getting denied. While this does happen, it’s very uncommon. There are only a few reasons why your life insurance company wouldn’t pay out. These reasons include if you falsify information on your life insurance application, have risky hobbies like bungee jumping, or if your beneficiary murders you.

Is suicide covered by life insurance?

It’s a question that nobody wants to ask, but it’s good to know. Most types of death are covered by life insurance, including suicide. The majority of insurance companies cover suicide, so long as it occurs after the exclusion period (meaning from the start of your policy).  For suicide, that period is typically 2 years. If suicide does occur within those 2 years, the policy would instead be voided and the premium you paid into it would be refunded, rather than the death benefit being paid.

Looking for a Virginia Life Insurance Agent?

Life insurance offers important peace of mind to you and your loved ones and can make planning for the future a little less stressful.

Ronnie Shriner Insurance Agency has proudly served residents in the Richmond, Virginia area since 1989. We specialize in tailored insurance plans based on each person’s specific needs, and we’re happy to help you select the best life insurance option for you.

Click here to contact us online, or email You can also call our office at 804-270-0406.

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