How Much Does the Average Life Insurance Cost?

Did you know that there are different types of life insurance? The 2 most common are term and whole life insurance. 

Are you considering life insurance, but aren’t sure about the average life insurance cost? In this article, explore the answer to this question plus more about the differences between the different plans. Read on to decide whether life insurance is for you, and if so, which will be your best option?

What Is Life Insurance?

Before exploring life insurance rates, it’s important to understand what life insurance is, and what it covers. It’s a contract that you’ll have with an insurance company. When you make payments on this contract, you’ll know that the insurance company will pay a lump sum to your beneficiaries(after death). 

You’ll need to choose between permanent and term life insurance. Your choice will affect the price you pay. If you choose permanent life insurance, that means it’ll provide permanent coverage, while term life is only for a certain period of time. 

Term Life Insurance

Term life insurance contains 3 components, which are the premium you’ll pay, the length of the coverage, and the amount of the death benefit. The policy will expire at a certain date. 

If you die during the policy, then your beneficiaries will receive the benefit amount. If you die after the policy expires, then your beneficiaries won’t receive a benefit. 

Whole Life Insurance

When you choose whole life insurance, it’s a permanent option and comes with savings as well. You can receive what’s known as a cash value with whole life insurance. 

If you live past the policy expiration, you’ll receive the cash value. You can also borrow money against it. 

How Much Is Life Insurance?

When buying life insurance, keep in mind that the price can vary. The average life insurance cost depends on the type, plus your age, and depending on the type, your health. When you take a look at all policies, you can expect to pay a bit more than $60.00 per month.

While this is a rough estimate, it can vary. For example, depending on your age and policy, you can pay over $200 per month. If you’re looking to save money for now, then term life insurance will cost you less per month. 

The risk with term life insurance is that it only lasts so long until the plan expires. While you’re paying more with whole life insurance per month, it’s a safer long-term option. 

The cost of your life insurance can vary by gender as well. Women tend to pay less per month than men do. This can be due to the fact that women tend to live longer than men. 

What Else Can Impact the Price? 

There are several factors that determine the average life insurance cost, for example, do you smoke? If you’re a smoker, this can raise the premium for your life insurance. 

Your Health

Certain life insurance policies can take a look at your medication and health history. They can check your medical exam and any medical records. Any pre-existing conditions can impact the price you pay. 

Adventurous Activities

If you’re a constant traveler or enjoy scuba diving or skydiving, you might experience a higher rate. If you have a bad driving history, this can impact your premium as well. 

How To Lower Your Premiums? 

You can lower your premium by avoiding any risky sports, and keeping your health in check. For example, quit smoking, exercise, and eat healthily. Try to maintain good cholesterol, blood pressure, and a healthy weight. 

What About Obtaining Life Insurance at Any Age? 

If you decide to obtain life insurance after you’re 70, it’ll cost more, and you’ll be more limited to your choices. Certain policies allow you to bypass the medical exam if you pay a higher premium. 

If you’re looking for permanent coverage, your best bet is to get signed up before 75. Some companies won’t offer it after a certain age. 

How Often Do You Pay Your Life Insurance Premium?

Some ask if they can pay their premium by the week, you can’t. The options are usually annually, semi-annually, quarterly, or monthly. If you pay the full amount in advance, you might receive a discount. 

Common Myths

There are common myths about life insurance such as that it’s a waste of money, or it’s too expensive. Remember that if permanent life insurance is too expensive for you, you can start out with term life. 

You Can’t Convert It

Certain companies will allow you to change your term life insurance over to permanent, you’re not stuck. Life insurance is there in case you can’t work anymore. This can mean the difference for your loved ones to pay for mortgage payments, and avoid losing their home. 

Whole Life Is the Best Option

While term life and whole life both have their own benefits, it’s a myth to think whole life is the best option for everyone. Instead of whole life insurance, you have the option to invest in funds, bonds, and stocks. Decide what’s the best option for you, and don’t just go by what the insurance agent is telling you. 

Exploring the Average Life Insurance Cost

Now that you’ve explored the average life insurance cost, you should be able to decide what’s the best plan for you, if any. Would you like to learn more about everything from health to entertainment? Check out our other articles today for both financial and nutrition advice. 

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