Average Cost Of Life Insurance


How much should  Life Insurance Cost?

average cost of life insuranceEveryone is aware of the necessities and benefits of life insurance. Life Insurance provides monetary safety to your dependents in case of any unforeseen event and enables them to enjoy a good quality life after you are gone. Apart from this, it is also an excellent way of saving money through the tax benefits you receive.  The one question that leaves most people confused is what the average cost of life insurance might be.

The average cost of term life insurance also keeps many people perplexed since there are many factors that can play into life insurance premiums. This article tries to demystify the complexities of life insurance and give you a clearer picture of how much your life and term insurance should cost and the types of life insurance available.

There are basically two types of life insurance policies that one can purchase. They are term-life policies and whole-life policies. Term-life policies pay only a death benefit to a beneficiary, whereas the whole-life policy has investment benefits too. The average cost of life insurance of course depends on the types of policy you take. The average cost of term life insurance is thus different from that of a whole-life policy. In general, the cost of term insurance is less than whole-life insurance, but the pricing depends on many other factors that are described below.

The first thing that one should know before evaluating the average cost of life insurance is that the annual costs primarily depend on your age at the time of applying for a policy.

If you start a policy at an age of 40, your premium would be much less for a similar policy than if you begin at the age of 50 or 60. In general, the average cost of term life insurance for 20 years of coverage and a $500,000 death benefit for a 40 year old individual would be about $350 a year.

Premiums of a similar term and benefit policy for a 50 year old can be as high as $1000 a year. This is because the insurance companies evaluate life risks differently at different ages.

The average cost of life insurance would also depend on how big a death benefit you want to subscribe for. As one can guess, the higher the death benefit you want, the higher the premium for the average cost of term life insurance would be. This kind of goes without saying, but one must be sure of how big a policy you want or in other words, can afford. There is no wisdom in subscribing for a policy that is too expensive and you cannot afford, just so that the returns are high in case of your death.

Another thing to keep in mind when calculating average cost of life insurance is of hidden costs. The average cost of term life insurance does not carry any hidden costs. However, the whole-life policies usually carry hidden costs in the form of fees. This makes these policies more expensive in terms of premium as compared to term policies. The average term policy premiums for $250,000 death benefit may be between $300-500. The premiums for a similar whole-life policy may be as high as $1200. However, keep in mind the extra benefits that these whole-life policies offer in the form of investment and returns.

Lastly, one thing about pricing factors that one should keep in mind is that the average cost of life insurance is determined by various factors that also include the lifestyle habits of an individual. If you happen to be a smoker, your premiums would be higher than the ones who do not smoke. Other genetic factors also have an effect on the cost of the insurance.

If you need more information you can contact us or get a free instant term life quote here.

About Speights Risk Management

Speights Risk Management is a family Life Insurance Agency that has been helping families and businesses for over 40 years. Questions? Contact us at 401-884-4600.

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