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How Much Does Life Insurance Cost?

Posted by : Premraj | Posted on : Tuesday, September 22, 2015

50th Anniver


As you might expect, the answer to this question depends a lot on your age, health, and the kind of policy that you want. The good news is that many people overestimate the cost of life insurance, realizing that it is much less than expected when they finally move forward with a policy. Putting off the purchase of a life insurance policy can be a bad idea particularly if your health declines over the years. The best way to get the lowest cost on your policy is to apply now while you are young and healthy. Doing so ensures that you have protection when you need it and at an affordable rate. Read on to learn more about some of the factors that could influence your life insurance cost.

Rate Classes

One of the most important elements of life insurance cost is the rate class. The better your rate class, the lower the premiums will be. If you are considered a relatively healthy individual, your premiums will be more affordable than someone classified as a “substandard” risk. In order for a life insurance company to assume the higher risk associated with a substandard application, the premiums will be higher. 

As an example, a 20 year term policy of $500,000 for a 30 year old male in excellent health is likely to cost around $20 per month. The same policy for a standard rate class might cost just at $40 a month.*

Another important distinction is whether you are a smoker or not. Being classified as a smoker can increase your premiums. The same individual above being classified as a standard smoker might pay around $90 per month, for example.

Type of Policy

Term life insurance is cheaper than permanent because the insurance company knows the exact end date of the policy and calculates mortality risk based on that. A permanent life insurance policy will be more expensive.

To use the example of the sample applicant above, an individual in excellent health seeking a 20 year term policy for $500,000 would cost approximately $140 per month. *

Length of Coverage and Face Amount

Both of these categories depend on your individual needs, but they can alter the cost of your life insurance. The longer your policy amount and the higher the face amount, the more expensive your premiums will be.

It is important to remember that there is an option for everyone when it comes to life insurance. It is all about knowing how to set up your quotes so that you can find the policy best for you. Playing around with the face amount and policy length can help give you an overview of what to expect when it comes to life insurance. You might be surprised at how easy it is to find affordable insurance!

**These numbers are accurate as of 9/2015. They are provided as examples only and are not indicative of any rates you are guaranteed or promised for life insurance.


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