How Much Does Life Insurance Cost On Average?

What causes sudden, unexpected death?

For people under 40, heart complications are the leading cause of unexpected deaths. One minute they’re going about their day–and the next, they’re gone.

No matter your age, life insurance is a great way to protect your family and loved ones. It’s also a wise financial decision to help you save money on taxes, reduce debt, or even fund college for the kids.

The best part? You don’t have to be rich to afford the protection you need today. How much does life insurance cost, and how can you get a policy? Read on to find out.

How Much Does Life Insurance Cost?

How much does life insurance cost? When you’re in the youngest age bracket, you can expect to pay as little as $200 a year or less on life insurance.

Whereas, once you start getting closer to 50 years old, that number will double or triple. By the time you’re in your 60’s or 70’s, you could be paying $10,000 for a life insurance policy.

Factors That Affect Life Insurance Prices

How old are you? The most expensive premiums are for people ages 18-29 and 30-39. People in these brackets pay four times more than someone who is 65+.

Why do older people pay more? With age, you’re more likely to have health problems, which would cause the insurance company to payout sooner than expected.

Next, age and gender also play a significant role in premium pricing. Young men are usually charged more than young women because they’re thought of as riskier.

Location and Lifestyle Choices

Does location matter? Absolutely! People who live in very populated or high crime areas will pay more for life insurance. At the same time, someone living in a statistically safe place will have lower price options.

Also, people living in small towns and rural areas tend to pay less on average. Low prices for small towns have to do with the decrease in risk. Unlike busy city streets, rural areas tend to be safer for pedestrians and drivers.

Lifestyle is the last factor in premium pricing. Lifestyle has only recently come into play in the previous decade or so. Insurers will usually use lifestyle choices to adjust premiums way up or way down.

For instance, they’ll raise rates for smokers and those who engage in high-risk activities. High-risk activities can be recreational, such as skydiving, mountain climbing, etc.

How can you lower the cost of your policy? By reducing your risk of death. It’s that simple. The healthier and safer you are, the less your policy will be. For example, if you’re an avid gym-goer, this lifestyle choice could help lower your premium.

High-risk Occupation Life Insurance Prices

What industry do you work in? Do you have one of the top 10 most dangerous jobs in America? If yes, get ready to pay up.

Those working in high-risk fields such as construction, logging, mining, etc., often pay more for life insurance. This is because of their increased risk of death on the job (due to the nature of their work).

Part-time Workers Pay Less

Regarding income, part-time workers often get lower premiums. There’s a more significant potential that they could lose their jobs and be without income.

If you’re working full time, though, don’t worry. You could qualify for discounted policy plans through your company.

Applying for Coverage

Are you ready to get a policy? You’ll need to get a medical exam. Be sure to fill out the exam paperwork completely.

An insurance company will usually decline or refuse to provide services if an applicant has preexisting conditions. In most cases, they won’t even bother trying to collect premiums.

Get an Agent

Want to make things easier on yourself? When you’re getting insurance, get an agent to help. Agents can access all of the rates of companies they work with. Then they can compare each rate against each other before presenting you with a quote.

Agents can also handpick quotes that best suit your needs. Instead of simply shopping for the lowest price, you’ll be looking for the right coverages. Having an agent means that the process is less time-consuming and more convenient for everyone involved.

Medical History Form

Next, let’s talk about medical history forms. Typically life insurance policies require applicants to fill out a medical history form. If someone has serious illnesses, such as cancer or diabetes, they will pay much higher premiums.

Whatever you do, don’t lie on your application or omit pertinent information. Lying about the information on an insurance policy is illegal in many jurisdictions. It’s vitally important not to deny information the law requires of you.

Furthermore, insurers have their ways of finding out if someone has lied on an application, so it’s not even worth trying to put one over them! If you do have preexisting conditions, then mention them upfront. Otherwise, you’ll wind up paying for coverage that won’t help when you need it.

Can You Switch?

Remember that you can always switch insurers. It may seem like once you’ve picked an insurer, then you’re stuck with them forever.

After all, switching means having to start over at square one as far as getting approved/denied goes. However, this isn’t necessarily true. Many states have passed legislation that allows people to change providers easily.

You can switch without losing all of the time they’ve already invested into their policy. That means you can transfer from one company to another without any additional hassles.

Never Cancel

If you already have life insurance, don’t cancel it. Life insurance rates fluctuate so much due to market conditions and your health status. Policies can become far more expensive than they originally were in just a few years.

Term vs. Whole Life Insurance Options

Now let’s explore the different types of life insurance policies! We’ll start by comparing term and whole coverage.

Whole life is a permanent policy that covers you for as long as you’re alive, and it doesn’t expire until your death. The premiums are fixed.

The whole life policy is ideal for those with stable job situations. The rate does not change even if something happens to cause an increase in risk (preexisting conditions).

Next, term life insurance only covers you while you are still alive. However, the rate changes depending on how much your risk increases by going from one point in time to another. If it expires, no beneficiary will receive a payout, but the money already paid into it isn’t lost either!

Universal Life Insurance

What about universal coverage? Universal policies can be mentally confusing. They’re essentially a mix between term and whole life. The procedure can last forever, like whole life, but only after 10 years have passed.

Universal policies have flexible rates as term policies do. If something happens to cause an increase in risk due to preexisting conditions, then the rate will change. However, universal doesn’t expire like term life insurance.

If an applicant receives approval for a universal life policy, then they receive one with no exclusions. In other words, there’s no preexisting condition clause) so the rates are fixed from the start.

How much does life insurance cost when it’s universal? The fixed rates will vary significantly from one provider to the next. You’ll have to get quotes for accurate price guestimations.

Variable Universal

Variable universal policies function just like universal ones. However, they can have flexible premiums/rates instead of being fixed at the beginning. The main downside to this, though, is that because interest rates fluctuate, your premium could rise or fall dramatically.

For those who are young and healthy variable universal could work perfectly. You can pay lower premiums and save money.

However, if anything changes, then your premium could become quite expensive. In a matter of minutes, you would need to upgrade to a different type of insurance.

Return of Premium Option

Moving on, you could also go with a return of the premium policy. This is technically an investment plan, not life insurance. How does it work?

If something happens while you’re insured, there won’t be any money paid out to your family. However, if nothing terrible happens, your beneficiary receives all of the money paid into it over time!

If the return of premium policy lasts until you retire, then it means that there is no risk. Even if something happens while insured, they still get every penny from premiums already paid—no exceptions!

The downside is that the return of premium policies only lasts a decade. They’re not ideal for young people or those who might need to change their plan after 10 years have passed.

Quotes Aren’t Accurate Prices

Let’s say you get a life insurance quote. Is this the actual price you’ll pay? Not quite.

A quote from an insurer typically is just a rough estimate of what your premium will be. Whereas the application process can take some time. You’ll have to provide personal information, like age and weight.

You’ll also need to provide medical records related to both current ailments or past injuries. Document anything that could affect your insuring status in future years. Nowadays, you can request your records online.

In the meantime, the insurer will take this information and use it to estimate how much they’re willing to charge you for insurance. Remember, if you don’t like their quote, shop around.

Temporary Coverage Options

Are you looking for an affordable way to provide financial protection for your loved ones but can’t commit to a long-term policy? Temporary coverage might be the answer.

Temporary life insurance is designed for people with busy lives. It’s for those who need some form of life insurance initially.

Temporary coverage can be designed with many different benefit periods. You’ll only need to purchase the amount of insurance you think you’ll need until your next transition in life – whether it’s a new job or marriage.

When comparing temporary policies, keep in mind that not all are created equal. It’s essential to look at the amount you need and how it will be paid out in the event of your death.

Some policies will provide a lump sum payment. Whereas others may offer a monthly benefit check. This can make a big difference when you want to leave an inheritance for your loved ones. You’ll feel confident knowing they’ll have enough to cover the bills.

Some temporary coverage options may be either term or permanent in nature. For instance, let’s say you know you need coverage for a certain amount of time.

Perhaps you need coverage until your graduate from college or get married. For this brief term, life insurance might be the best option.

When To Buy a Policy

If possible, it’s a good idea to sign up for policies during January. This is when most people are shopping around and can get a better deal on premiums.

However, if you don’t have life insurance, don’t wait to get it. Start the process today. Reach out to several life insurance agents, and get quotes. Then begin the application process. It’s that simple.

In almost all cases, policies come with what’s called a free look period or “free look.” You can cancel your policy within two weeks after you make the initial payment.

However, keep in mind that your insurer will not refund any payments made to date if you opt for cancellation within this time frame.

Start the Process of Getting Life Insurance

How much does life insurance cost? Now you know it’s a complex calculation that takes all sorts of factors into account. Fortunately, you don’t have to do everything by yourself.

Licensed life insurance agents will work with you through the process and help educate you on what your options are. Then they can provide you with a quote based on your needs and budget.

So don’t wait – contact a life insurance agent today. For more articles about securing your future, see what the rest of our blog is all about.

Show More

Writing Views

Writingviews is a pioneering website that tends to explore the writing skills of young writers. The writers are encouraged to put their cultural, political, literature, and scientific ideas in the form of blogs. The world needs your ideas as they do matter and we provide you a platform.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Check Also
Back to top button