What Life Insurance Costs Based on Your Needs
The first two questions most people ask when they look into life insurance coverage are very often: “How much will it cost?” and “How much do I need?” Life insurance costs can be a challenge to calculate because there are several types of life insurance, including whole life, universal life and term life insurance. The cost of life insurance is unique to each individual and depends on the type of policy you choose, the amount of coverage you want, and factors such as your age and overall health.
Comparing online life insurance rates can be a good way to get an idea of what you might pay in premiums. But to get a customized plan that fully meets your needs and budget, it is a good idea to work directly with an agent. For detailed answers and a review of your situation, contact an independent agent in the Trusted Choice® network who specializes in life insurance. An local member agent in your area can help you evaluate your options and provide a customized quote.
Factors That Affect Your Life Insurance Costs
- Age: Overall, life insurance rates increase as you age.
- Health profile: Do you have any chronic conditions? Do you smoke?
- Gender: Women live longer, statistically, and typically pay lower life insurance costs.
- Occupation: Receptionist? Machine operator? Sky diving instructor? Yes, it matters.
- Exams: “No exam” life insurance quotes are available, but are typically more expensive.
To look at some average life insurance rates, we will review several scenarios. Why? Because the average cost of life insurance for a 30 year old male who smokes is very different from the average cost for a 30 year old female with a clean bill of health. To illustrate the range of costs associated with life insurance, the following section will give some hypothetical scenarios for you to think about before you buy a plan.
The Average Cost of Whole Life Insurance
The following average costs were calculated using the following assumptions:
- The individuals are a healthy weight and do not live a hazardous lifestyle.
- They want $500,000 worth of life insurance.
- They want monthly “level pay” (same payments for the duration of the policy).
The average costs will differ when any of the variables change. For example, a 35 year old female nonsmoker would pay an average of $731.57 if she wanted 1,000,000 worth of whole life insurance or about $188.36 for $250,000 worth of whole life insurance.
The Average Cost of Term Life Insurance
The following average costs were calculated using these assumptions:
- The individuals are a healthy weight and do not live a hazardous lifestyle.
- They want $500,000 worth of life insurance.
- They want to pay monthly for a 20-year term policy.
Again, the average costs will differ when any of these variables change. For example, a 35 year-old female nonsmoker would pay an average of $61 per month for $1,000,000 worth of life insurance with a 20-year term, and $23.90 per month for $250,000 worth of life insurance with a 20-year term.
Does Life Insurance Cost More in Certain Regions of the U.S.?
There can be some differences in your life insurance costs, depending upon your state and region. Life insurance companies use “mortality tables” to help predict the benefits they are likely to pay in a given year. Why? Because the amount they collect in premiums must be less than what they pay out in benefits, and these actuarial tables ensure that they will not end up in a deficit.
Some factors that may be taken into account to calculate your life insurance costs in your region include:
- Whether there is a high rate of obesity in your state or region
- If the area experiences a high rate of deadly natural disasters, such as earthquakes
- If the region is prone to certain diseases, such as black lung disease typical in miners
- If the state or region has a high mortality rate due to crime
- How many policies have been written in that area
Even with these factors taken into consideration, rates do not typically vary significantly from region to region. For example, if you live in an area prone to earthquakes and high crime, your life insurance rates will be affected more by your age and personal health profile than where you choose to live.
How to Lower Your Life Insurance Costs
Because health and lifestyle play a key role in determining your life insurance rates, the key things you can do to lower your payments have to do with improving your health and reducing your risk of chronic conditions like diabetes or cancer. Being a non-smoker is perhaps the most critical choice you can make to reduce your life insurance rates, but there are many more things you can do as well.
For example:
- Maintain a healthy weight to reduce the risk of obesity and related chronic conditions.
- Get a body mass index (BMI) check done
- If you have a high BMI, work with a health professional to lose excess weight
- Maintain your heart health to reduce the risk of hypertension, heart attack and stroke.
- Get an annual physical
- Regularly check your blood pressure, cholesterol, and triglyceride levels
- Work with a health professional to improve your numbers, if needed
- Reduce stress, improve your diet and increase exercise
- Manage your blood sugar to reduce the risk of diabetes.
- Request a blood sugar test
- Obtain a diet and exercise plan to help manage blood sugar levels
In addition to assessing your overall health, most life insurance companies will also review your risk of death from a high risk sport or work related accident. For this reason, your career choices and the activities you choose to do for fun can also impact your life insurance rates. If you work at a desk job, versus a career as a skydiving instructor, under-water welder or a rodeo clown, you will find that more insurance companies will be willing to insure you at a more affordable rate.
To get more information on life insurance rates, find an independent agent in the Trusted Choice network today. An agent right in your area can help you evaluate your life insurance options and costs based on your unique circumstances.
