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How Does Life Insurance Work in Florida?

In Florida, life insurance is a contract between an insurer and the insured that involves paying out a death benefit to policy beneficiaries when the insured dies. Policy beneficiaries are the people or entities you designate to receive the policy's death benefits. These beneficiaries can be your spouse, siblings, parents, adult children, charity organizations, business partners, or a trust. College tuition fees, funeral expenses, daily expenses, and payment for outstanding debts can be covered with the death benefit obtained from the policy.

Asides from death benefits, you can also take advantage of living benefits. With living benefit riders, you will be able to access the money set aside as your death benefit while still alive. For instance, if the insured has a terminal illness rider and develops cancer during the policy term, they will be eligible to take out the death benefit to treat it. However, the amount will be deducted from the final death benefit that would be paid to the policy beneficiary after the insured's demise.

After a life insurance policy is purchased in Florida, the insured is expected to pay premiums to ensure the policy remains active. Insurers use many factors like age, gender, medical conditions, type of policy, occupation, and coverage amount to determine premium rates. Generally, when purchasing life insurance options, it is important to consider the following:

  • The amount of death benefit you need
  • Which type of policy to purchase (term life or permanent life policy)
  • Premium cost
  • The type of riders to add to your life insurance policy
  • The difference between life insurance quotes for each available policy

Insurers do not just automatically pay out death benefits. They are paid when the insured dies, after which the policy beneficiaries are required to file a claim with the insurance company. They would have to provide a copy of the policy, proof of identity, and a certified copy of the death certificate along with the claims form. There is usually no deadline for filing a life insurance claim in Florida, but it is always better to do it as soon as the insured dies. Before their demise, insureds can decide how the death benefit will be distributed to their beneficiaries (that is, what percentage of the benefit goes to who). They can instruct that the insurer pays it as a lump-sum payment after their death or in installments throughout the beneficiary's lifetime or a specified number of years.

What Can You Do With Life Insurance in Florida?

In Florida, there are many things you can do with life insurance policies, depending on the type of life insurance option you purchase. Some common things you can use your life insurance for are:

  • Paying final costs: Life insurance policies like final expenses can help reduce the stress your loved ones might face after your demise by paying for end-of-life expenses. Such expenses may include medical bills of the insured, cover funeral expenses, such as funeral service, burial or cremation, or other immediate expenses after death.
  • Minimize your taxes in retirement: Life insurance can be used as a pension/retirement savings tool where you can have an ongoing stream of tax-free money in retirement. If you purchased a life insurance policy with a cash value component, you could borrow against it to pay for expenses during your retirement years.
  • Paying off debts: Leaving large debts behind without making provisions for how they will be paid can make your loved ones suffer financially after your demise. However, having life insurance will help your loved ones receive death benefits that can be used to pay off any outstanding debts.
  • Providing financial support for your loved ones after your demise: With the death benefit from life insurance policies, your loved ones would not have to worry about their living expenses after your demise. This is because the amount received from the insurer would be able to cover daily expenses, college tuition fees, and mortgages.

Use the life insurance policy comparison worksheet to assist with shopping for and comparing life insurance quotes in Florida.

What Kind of Life Insurance is Available in Florida?

There are two basic types of life insurance options in Florida:

  1. Term life insurance: Provides insurance for a specified period, such as 10 to 30 years, at a reduced cost. The death benefit of term insurance policies can be used to cover college tuition fees, mortgage, or end-of-life financial obligations like burial expenses and funeral costs.
  2. Permanent life insurance: Provides lifelong coverage to individuals. A typical example of permanent life insurance is a final expense. Other permanent life insurance variations, including universal life, indexed universal life (IUL), and whole life insurance, typically come with a cash value component.


Cash-value life insurance offers lifelong financial coverage and a cash value (CV) savings component, which does just that - it builds cash overtime, similar to an investment account. Most permanent life insurance policies fall into this category. Cash-value life insurance usually has higher premiums than term life insurance because of the cash value component. A part of the premium paid by insureds is allocated to the insurance cost, and the remaining is deposited into a cash-value account. In addition, insureds earn tax-deferred interest on their cash value account that they can access via withdrawals, loans, or surrendering the policy. The common cash value insurance policies available in Florida are:

  • Whole life insurance
  • Universal life insurance
  • Final expense (FE) insurance

While Whole life and Universal life are primarily designed for healthy individuals, Final Expense is considered the go-to life insurance for seniors in Texas, who likely have a pre existing condition or two, and are unlikely to qualify for more affordable options due to medical history or age.

TERM LIFE Insurance

In Florida, term life insurance provides financial protection for a temporary period ranging from 10 to 30 years. Death benefits are paid only if the insured dies during the policy’s term. Most term life insurance policies do not accrue cash value. Initial premiums for term life insurance are usually more affordable than permanent life insurance plans. An initial premium is an amount an insured pays at the inception of an insurance contract. Term life policy is good for parents of young children and individuals with large financial obligations because they can get reasonable death benefits at a reduced cost. Also, policy beneficiaries can get significant death benefits for income replacement.

Term life insurance coverage typically ends after the policy term. Insureds can renew their policies, but their premiums will increase with age because the older they get, the higher the chances for their insurers to pay out on their policies. Additionally, insureds can convert their term life insurance policies for permanent policies like whole life policies. Doing this will attract higher premiums, but the premiums will remain the same throughout the insured's life.

Who Is the Owner of a Life Insurance Policy in Florida?

The owner of a life insurance policy in Florida is the person who has full control over the policy while the insured is still alive. Most times, the policyholder is the same person as the insured, while other times, the insured will appoint a different person to be the policyholder. The policyholder can change the policy beneficiary, surrender the policy, sell the policy, or gift it to a relative, child, grandchild, or charity by transferring full ownership of the policy to them.

When Does Florida Life Insurance Mature?

Maturity dates are based on the insured's age, and it differs depending on when the policy was issued. Typically, the maturity date of all life insurance policies is after the insured's demise. However, it can also be when the insured reaches age 121, depending on which Commissioners Standard Ordinary Mortality (CSO) table was used to determine their probability of dying in a given year. When a life insurance policy matures, the insurer pays out the policy's maturity value, and coverage ends.

Is There a Deductible in Life Insurance?

No, unlike property insurance, life insurance does not have a deductible which the insured must pay, because fro the life insurance to pay out - the insured must die.

What is a Premium in Life Insurance?

Premium in life insurance is the amount you pay an insurer to provide life insurance coverage. In Florida, you can pay your premiums in installments or upfront using any of the following payment options:

  • **Regular premium payment: **This requires you to pay periodically or regularly, which could be monthly, quarterly, or yearly based on your agreement with your insurer.
  • Single premium payment: With this option, you will have to make a one-time full, upfront premium payment
  • Limited premium payment: You are expected to pay your premiums for the entire policy term within a specific period, such as 20 years, while the policy provides a lifelong coverage

What Is a Death Benefit in Florida Life Insurance?

A death benefit in life insurance is the amount of money an insurer pays out to the policy beneficiaries after the insured's demise. The insured can decide how the money will be shared before dying. Insurers are obligated to pay a death benefit only if the policy was active before the insured's death. A typical death benefit in Florida is usually tax-free.

When is Death Benefit Payable?

A death benefit is payable in Florida after the demise of the insured. Insureds should share life insurance policy information with beneficiaries after buying it to make it easier to receive death benefits. This is because there is no national insurance database or other central location that provides policy information. This might make it very difficult for policy beneficiaries to file a claim after the insured’s demise because they are not even aware that the life policy even exists in the first place.

After the insured's death, the policy beneficiary is required to file a claim with the insured’s life insurance company. The policy beneficiaries will need to fill out death claim forms stating the insured's name, policy number, Social Security number, and date of death. After filling out the form, the beneficiary will have to submit the death claim form with a certified copy of the death certificate. If the insured named multiple beneficiaries in their policy, all of them would have to complete a death claim form to receive the death benefit that accrues to them.

What is a Living Benefit in Florida Life Insurance?

In Florida, living benefits insurance is a type of rider that an insured can add to their life insurance policies to access some of the money set aside as their death benefit while they are still alive. The amount paid to the insured would be deducted from the final death benefit that the beneficiaries are meant to receive after the insured's demise. Common living benefit riders in Florida are:

  • Accidental death rider
  • Terminal illness rider
  • Critical illness rider
  • Long-term care rider

The percentage that insurers permit insureds to access from their policies’ death benefits as a living benefit varies depending on the type of policy. For instance, insureds can use up to 20% of their death benefit for end-of-life medical care, and those with critical care or chronic care riders can get up to 35% of their death benefit. Insureds with tax-free retirement as a living benefit can borrow against nearly all cash value, as long as the policy remains paid and active once they turn 65 years old. The more insureds borrow, the less their death benefits become (since the death benefit will be used to pay off the loans at death). Insureds may be required to provide proof of life expectancy from a medical provider before access to death benefits can be granted.

Does Life Insurance Cover Suicide in Florida?

Life insurance in Florida covers suicidal death as long as the policy was purchased two years or more before the insured's demise. After that, the insurer will pay death benefits to the policy beneficiaries. However, suppose the insured dies during the first two years of the policy, and the insurer, upon investigation, discovers that the cause of the death was suicide. In that case, it will not pay the death benefit to the policy beneficiaries. Instead of the death benefit, policy beneficiaries will get a refund of any premiums paid, and in the case of a permanent insurance policy, some cash value may be paid.

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