In simplest terms, a life insurance is a sum of money you pay, either as a monthly, quarterly, or yearly contribution, to an insurance company wherein the money is given back to you when you have retired or in a life-threatening situation. But if you pass away, then the beneficiary you named will receive the amount of money you set aside for your life insurance. Investopedia has also pointed out that “the death benefit is paid by a life insurer in consideration for premium payments made by the insured.”
Average Cost of a Life Insurance
Although a life insurance policy is not always a necessity, there are some people, especially those with children, who still want to make sure that the future of their kids are secured even when they are gone. In that regard, it would be ideal to know the cost of a life insurance before purchasing one.
Whole Life Insurance
The average life insurance cost depends on so many variables. For a whole life insurance, you have the following considerations:
– You have a healthy weight without any vices.
– You want a life insurance worth of $500,000.
– You want to pay it every month.
If any of those variables change, then the average costs will directly change. Let’s assume that you are a 35-year-old female who doesn’t smoke. You will pay an average of $731.57 if you want a whole life insurance worth of $1 million. If you want to to have a $250,000-worth of life insurance, then you pay around $188.36. This is according to the calculations of Trusted Choice.
Life Insurance by Age
However, the life insurance policy cost per month significantly depends on the buyer’s age and lifestyle status. ValuePenguin based their calculations on a 20-year term policy worth $250,000 and determined the average annual life insurance price for clients who are smokers and non-smokers and whose ages are between 25 and 65 years old. Here are the following annual costs you can consider:
| Age | Non-Smoker | Smoker |
|---|---|---|
| 25 years old | $330.33 | $668.54 |
| 30 years old | $334.54 | $721.99 |
| 35 years old | $359.78 | $809.02 |
| 40 years old | $432.36 | $1,175.35 |
| 45 years old | $619.42 | $1,881.55 |
| 50 years old | $918.91 | $2,798.50 |
| 55 years old | $1,455.34 | $4,469.64 |
| 60 years old | $2,492.43 | $6,668.71 |
| 65 years old | $4,172.01 | $11,859.78 |
Evidently, individuals who smoke have higher life insurance prices, so be sure to quit early if you wish to not to spend so much on your life insurance policy.
Points to Consider When Buying Life Insurances
If you look at the prices of life insurance policies, they increase as your ages increases, so you need to be financially ready for the expenses in the long run. To help you with this additional expense, here are the things that you need to consider as provided by the National Association of Insurance Commissioners (NAIC):
– Choose the insurance policy that provides the benefits you really need.
– Make sure that you can afford the premiums.
– Read and review the provision carefully. Don’t sign anything if you haven’t read all the details of your insurance plans.
– Don’t purchase an insurance policy if you are half-hearted. You have to be certain that you’re able to pay it until the end. And if possible, don’t change your policy. It may be expensive.