Life insurance premiums may vary depending on the type of insurance you require, but they are surprisingly affordable. For example, you can get a single variable life policy at an average rate of $40 per month as well as a single universal policy for $55/per month.
There are different types of life policies available on the market, including whole-life policies that are guaranteed to pay out and temporary-term life policies that are more affordable. In fact, life insurance isn’t one-size-fits-all, but the average rate will let you know what you have to pay. Many factors are taken into consideration when calculating life insurance costs, including the type of coverage, the age of the candidate, where he or she lives, and various other personal factors.
Factors That Affect Life Insurance Costs
Your age, weight, medical condition, and whether you use tobacco are some factors that may affect the price of your life policy. Your life insurance application will ask for information about your specific situation so that the insurer can determine the best way to get you covered.
Age – Older people pose a higher risk to the insurer, and their premiums will usually be higher. Pro Tip: Get your life insurance policy when you are young in order to lock in a lower price for the long term and save money in the process.
Gender – Research shows that women live longer than men – all else being equal. Hence, women pay less for life insurance than men. The insurer will typically consider the gender that you were assigned at birth.
Lifestyle – The insurer will want to know if you are participating in any high-risk hobbies, working in a dangerous occupation, or whether you travel to dangerous places before calculating the premium for you.
Health – The insurer will categorize your health depending on your overall health and family history. The cheaper your policy will be, the better your health is.
Coverage Amount – You should expect to pay more for a higher coverage amount.
Location – Life insurance premiums may vary depending on where you live in the U.S. On the other hand, the cost of life insurance in Canada is higher compared to some of the states in the U.S.
Term – The longer the term, the more you have to pay. That’s because the insurance company is committed to not changing your premium over the longer term. But your mortality risk increases with time.
What Is The Average Cost Of Term Life Insurance?
There is no straightforward answer to this question. In fact, simple tables that show the average premium by age or gender can be misleading at times. The best way to know how much you have to pay for term life insurance is to apply for a policy.
How Do You Lower The Cost Of Life Insurance?
Even though it seems life insurance costs are set in stone, fortunately, that’s not the case. In fact, there are many ways to lower life insurance costs. Here are some of the most effective ways of lowering the cost of your life insurance policy:
- Don’t Rush!
Don’t rush your decision when choosing life insurance because you will have it for many years or decades to come. Factor in your future needs when getting suitable coverage.
- Get The Right Type Of Life Insurance Coverage!
While term life insurance is more affordable right now, a permanent policy will be better for your future – taking into consideration its cash value component.
- Shop Around!
Don’t take the first policy that is available to you. Ask different insurance companies what their rates are and shop around before you get the right life insurance policy to meet your needs and budget.
- Get Professional Assistance!
Get professional assistance if you are still confused as to what type of policy you should get and which insurance company to use. There are many insurance brokers out there who aren’t tied to a particular insurance company. They will provide you with unbiased advice on how much coverage you should get and which provider to apply with.
- Check Out Extra Costs!
The more complicated your policy is, the more vigilant you should be. In fact, you should watch out for things like fees, commissions, interest, special rates, discounts, and interest on loans.
- Buy The Policy as Early as Possible!
Get your policy as early as possible since the earlier you get it, the cheaper it will be. But you shouldn’t rush the process when choosing the right coverage and insurance company.
Conclusion
There are many factors that affect life insurance premiums. Your monthly premium is tailored to you, and the best way to know your premium is to apply for a policy. Know that life insurance is much more affordable than you think. Since the premium goes up with age, you should start sooner than later.
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