Cost of Life Insurance
Holding a life insurance policy is an intelligent thing to do whether you’re a healthy 20 year old or you’re a disease ridden 80 year old. A life insurance policy will give you the peace of mind that if you pass, your family and loved ones will have the funds to live comfortably. One of the least expensive types of insurance is a term life insurance policy which is an agreement amongst the policy holder and insurance provider that assures a specified amount of money will be paid to the family at the time of death of the policy holder. The policy is usually valid between 10 and 30 years and after which will need to be renewed by the policy holder.
Factors that Determine Cost
There are many different elements that will affect the price of the monthly premium that are specific to each individual. Factors such as age, weight, height, lifestyle, and overall health are the main conditions which determine the final cost along with coverage. Because there are so many different companies and so much personalization that goes into each policy, it is best to talk with local insurance companies to get a quote specific to your situation.
As an example, a policy with $500,000 dollars in coverage could cost anywhere from $250 up to $800 annually. A $750,000 policy will increase the yearly premium up to a minimum of $680 or a maximum of roughly $1,000 which is substantially higher. One of the largest factors that determines the yearly premium is the age of the policy holder. Of course the older we get, the chances of imminent death increase so instinctively, the cost of life insurance will increase as well. For a 40 year old man, a $500,000 life policy should cost around $350 per year if he’s healthy. When the same healthy man hits 50 years of age, the cost will raise to around $1,000 per year. At the age of 60, that same healthy man could be paying as much as $3,000 per year.
As stated, a yearly premium must be paid to insure your beneficiary the agreed upon amount of money in the event you pass away. This could be looked at as an extra cost but it is also expect and agreed upon when the contract is signed. A cost that could be a bit more unexpected is if the agreed upon amount of time has passed and you are looking to renew your policy. Your policy is usually either good for ten, twenty, or thirty years based on what you originally agreed upon. When you go to renew it after this time has passed and you have not, the rates most likely are going to be higher and you will stuck paying these rates versus the original agreement.
Ways to Save
Talk to different insurance companies and get multiple quotes. There are tens if not hundreds of different companies that provide life insurance and they all have different rates. You are almost guaranteed to find a company that will charge you a lower yearly premium than their competitors and still offer the same benefits.