How much should you pay for life insurance?
There is no "one size fits all" life insurance policy. Your life insurance plan should be catered to your needs, which should primarily be based on your health and financial situation, among other things.
As with any plan that comes with a price, you'll want to crunch the numbers to determine the exact amount of coverage you need and how much you're willing to pay each month. Factors like your age, health (pre-existing conditions, whether you're a smoker, etc.) and your family history will help determine how much you will pay in premiums.
If you don't have life insurance now is a good time to act. Start by getting a price quote.
How much to pay for life insurance
Not sure how much your monthly life insurance bill will be? It really depends on some of the following factors.
Insurance type
There are two primary types of life insurance you'll want to consider:
- Term life: This is a pre-determined set amount of time in which you'll be insured. It will need to be renewed (which may result in higher premiums down the road). Term life insurance tends to be cheaper because it has an expiration date. Unlike whole life insurance, it doesn't have a savings element to consider.
- Whole life: This type of insurance remains active for a full lifetime. Whole life insurance tends to be more expensive because you generally have more benefits than term. Some whole life insurance policies pay a dividend. You can also build up the dollar value of the policy and cash it out to use for other expenses, debt and beyond.
Although these are the two most well-known, there are many other kinds to choose from including universal and variable. Determine which type of life insurance plan you want and get a price estimate today.
Health
Your health, age and family history all play a role in life insurance costs.
- Health: What kind of shape are you in? Life insurance companies will want to know that information before they agree to insure you. They will do an exam and bloodwork and, depending on your health at the time, you may pay more or less. Do you smoke, or did you smoke previously? Smokers are prone to a whole series of health issues that could make them more pricey to insure. That price differential will be reflected in your monthly bill.
- Age: The younger you are, the safer a bet you are to insurance companies. So you'll pay a lot less than you would if you were older. That said, life insurance for older adults can still be worthwhile and it doesn't need to be expensive, either.
- Family history: Is there a history of heart disease in your family? What about cancer or diabetes? Your genetics could be a predictor for future (costly) health issues.
Occupation
Your job can also cause a price hike or limit your insurance options, particularly if it's high-risk or hazardous, which increases the potential of accidents, injuries or even death.
How to get cheap life insurance
While life insurance and the associated costs are personal to each policyholder, there are some reliable ways to make sure you don't overpay.
- Start early: The younger you are the less risk you present, making premiums generally more affordable than if you had waited until medical issues arose.
- Comparison shop among companies: Don't take the first deal you get. Review at least three providers to make sure you're getting the best coverage for the most reasonable cost.
- Complete a thorough process: No-exam life insurance may not require a medical exam. But you won't get cheaper life insurance by going this route. Don't pay more for less. Complete the traditional life insurance vetting procedures.
The bottom line
The above list is not exhaustive and other items may be taken into account. Life insurance companies will potentially insure you for hundreds of thousands of dollars so they'll want to be fully aware of who they're covering.
You could end up paying as little as $17 per month up to and surpassing $75 per month (or more). Head to a life insurance provider today to get the best rate for you and your family.
There are also some things you don't have to worry about when trying to accurately gauge your monthly life insurance cost. This includes, but is not limited to:
- Your race
- Your sexual orientation
- Your credit score/history
- Your marital history
- The planned number of beneficiaries you would add to an account
