If you’re new to buying life insurance, then you need to know about the state and federal laws that govern insurance companies. They can be tricky to understand because laws are regulated differently. For example, employee sponsored life insurance policies are regulated by federal laws, which preempt any state laws for personal policies.

If you’re married and you live in a community property state, once you purchase a policy, then the law states that you both are equally entitled to the policy. If you’re concerned about your income affecting your premium rates, there’s no need to worry. Income is never used to determine premiums. In most states, your age and gender will determine your premium rates.

If you participate in the Medicaid program, you’ll need to understand your state law because the Medicaid program caps participants’ assets at $2,000. Any life insurance you’ve purchased counts as an asset. However, some states have higher asset limits, which may be beneficial once you decide to purchase a policy.

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