Your life insurance cost depends on many different things, including your age, gender, and coverage amount. Many young people put off purchasing a policy because they view it as an unnecessary expense. However, you can often get a policy for very affordable rates.
What is the average cost of life insurance?
A single variable life policy can cost you as little as $40 a month. If you are more interested in a universal life policy, you could find yourself paying about $55 a month. Since those numbers are simply averages for individuals across the board, you could find yourself paying more or less.
In this article, you can learn more about all of the factors that determine your premium. We cover:
- Age
- Gender
- Timing
- Health
- Coverage Amount
Age and Life Insurance
As with any other insurance, life insurance premiums depend on the provider’s risk. It’s important to remember that insurance companies are a business, and they make their money from premiums. If a person is more likely to cash in on their policy after only paying premiums for a year, then there is more risk to insure them. For this reason, insurance companies have to charge a higher premium.
Let’s take a look at some examples:
A 30-year-old man in perfect health takes out a 20-year life insurance policy. Since it is less likely that he will receive his death benefits, he could pay less than $25 a month.
A 50-year-old man in excellent health may only need a 10-year life insurance policy to get him to retirement, but he could still pay twice as much for the same amount of coverage as the 30-year-old man.
Impacts of Gender
Your life insurance policies are calculated similarly to your health insurance premium. A lot of research goes into determining the risk of insuring women versus men. Most companies charge men higher premiums than women. While the difference is usually insignificant for people under the age of 50, the gap in premiums starts to become more noticeable after age 55. At this point, men start paying an average of 27% more than a woman. The gap widens with age.
Timing—Should You Wait?
Most young people never give life insurance a second thought. They put off shopping for policies until later because they don’t think they’ll need it. Some people may choose to wait until they have kids. Others might wait until they have extra room in their budget to pay the monthly premium.
However, people without kids still need life insurance, and if you don’t have the funds to pay a small monthly premium, you definitely won’t have enough money to cover end-of-life expenses or debts. For that reason, you should consider getting life insurance right now. Putting off buying life insurance could end up being a costly choice, but it’s up to you to determine the best timing for your family.
Health
A young, healthy person can usually get a life insurance policy by simply answering a few simple application questions. However, the process can get more complicated for older people and anyone with a pre-existing condition. They often have to get underwritten life insurance.
Underwriting is the process an insurance company uses to determine the risk of insuring you. They often have you undergo a medical exam and testing to see how healthy you are. Though it is inconvenient, healthy people can also get underwritten life insurance if they would like to lower their premiums.
Coverage Amount
Lastly, your insurance premium is going to depend on the amount of coverage you need. If you require a lot of coverage, you should expect to pay more money. However, you shouldn’t skimp on coverage just to lower your premium. We recommend that you assess your current financial situation and any future financial factors to find the right balance for your needs and budget.
Request a Life Insurance Quote for More Information
Though we wrote this guide to tell you the basics of life insurance costs, we can’t give you a straight answer. Premiums vary so widely from person to person and company to company. The only way you can truly find out the cost of your life insurance is by contacting an agent. We suggest that you get a life insurance quote from several companies before making a selection.
