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What Does Life Insurance Cost?


There are very few types of insurance that are universally recommended for everyone. After all, not everyone owns a home or a car, much less a business. However, there is one type of insurance policy that every individual should have: life insurance.

Yet nearly 100 million Americans still don’t have this crucial policy, with more than half of them saying that it’s simply too expensive.

Purchasing life insurance is not only one of the smartest financial decisions you can make, but it’s surprisingly affordable as well! Let’s talk about the average cost of life insurance along with valuable information you can use to find a policy that fits your needs as well as your budget.


What Does Life Insurance Cost?

Life insurance is much more affordable than the typical auto or home insurance policy. In fact, you’re probably paying more for your favorite streaming services!

On average, a $500,000, 20-year term policy for a healthy 30-year-old will cost less than $250 per year (less than $20/month). However, it’s important to remember that averages are just that: averages.

There are many factors—such as your age, gender, and lifestyle—that will affect how much you pay for life insurance. The best way to find out how much life insurance costs is by getting a quote through an independent insurance agent.

Because they are not tied to a specific insurance company, independent agents can shop the market and bring you a variety of quotes.

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How Are Life Insurance Premiums Calculated?

Like any other type of insurance, life insurance rates are based on specific factors.

  • Age – The younger you are when you purchase a life insurance policy, the lower your rates tend to be.
  • Gender – Because women tend to live longer than men, their life insurance rates tend to be lower.
  • Health – Because your medical history affects your lifespan, healthier individuals tend to receive lower rates, while those with pre-existing conditions may pay more.
  • Smoking Habits – Smokers should expect to pay considerably more for life insurance than non-smokers.
  • Policy Type – Which type of life insurance you purchase will have a huge impact on your premium amount. For example, term life insurance rates are often lower than permanent life insurance, since it only lasts for a certain period of time.
  • Coverage Amount – Finally, a higher death benefit amount will often result in higher premiums.

Your life insurance company uses these factors to help them determine 1) how long you are expected to live and 2) how much they will have to pay your beneficiaries.

However, each insurer will weigh these factors differently, which is why it’s important to get life insurance quotes based on your own data (not that of your family or friends).


How Much Life Insurance Do I Need?

Purchasing the right amount of life insurance is the key to making sure your beneficiaries will be taken care of after you’re gone.

To help decide how much coverage you need, think about the expenses that your beneficiaries will face without your contributions. Do you have significant debt? Will they have to pay for your funeral and burial? Will they be able to pay the bills?

Keep in mind that these contributions aren’t always financial. If a stay-at-home spouse passes away, you will have to start paying for childcare, housekeeping, and other expenses.

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How To Save On Life Insurance

The good news is that there are steps you can take to reduce life insurance premiums and make your policy more affordable.

  • Purchase it early. Purchasing a policy at age 25 will cost much less than purchasing it at age 60. If you’re even considering life insurance coverage, don’t delay!
  • Purchase a term policy. If the average cost of term life insurance is $300/year, the cost of whole life insurance is closer to $4,000. If you only need coverage for a certain period of time, a term policy may be best for you.
  • Pay premiums annually. Most insurers offer a discount on premiums if you pay them once a year rather than once a month.
  • Get and stay healthy. Many policies require that you take a medical exam. By getting your health under control, you can help keep premiums low.
  • Use an independent agent. Independent agents are able to collect quotes from multiple insurance companies, offering you quality coverage at a price you can afford.


Life Insurance Is Worth It

When it comes to its ability to protect your family, life insurance is well worth the premiums.

No one likes to think about their own mortality, but taking some time to prepare for this (unavoidable) circumstance will go a long way toward making sure your loved ones don’t have to worry about finances during an already difficult time.

As one of Florida’s top independent insurance agents, Darr Schackow Insurance will discuss your needs, goals, and budget to help you find a life insurance policy that’s just right for you.

Contact us today for a free quote.



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