Looking ahead in the future, purchasing life insurance is a good investment that will grant you peace of mind and security at whatever time you die and for your beneficiaries. But some people detest making an investment in life insurances because they consider it a very costly affair. In the findings of this discussion, we shall take a look at the average life insurance cost per month and some of the things that can make your policy costly.
Life Insurance Basics
Before the cost of life insurance is considered, one must have a general view about the details of life insurance. Life insurance is a contract between the insured and the insurance company, whereby the insured pays the insurance company periodical payments in the form of premiums, and in return, the insured is paid a lump sum assured to the beneficiaries on the insured’s death. The three categories of policies where life insurance is found include term life insurance, whole life insurance, and universal life insurance.
Term life insurance, that which is effective for a term of years or for a period of time, is generally a term of 10 to 30 years and is the most basic and most affordable form of life insurance. Whole life insurance and universal life insurance are more expensive and more complex and are in effect for the entire life of the insured, with the policy accruing cash value.
Monthly Insurance Cost
Generally, the average cost per month of life insurance will vary based on your age, health condition, lifestyle, level of coverage, and type of policy. Here’s an average cost per month for $500,000 death benefit for a 20-year term in the latest data that you will find from sources like Policygenius:
- At the age of 25 years: $20.42 per month
- 35 years of age: $25.15 per month
- Age 45: $60.14 per month
- 55 years old: $129.65 per month
Life insurance is apparently expensive as you advance in age, and the most expensive jump in cost happens between the 35 years to the 45 years bracket. This is because age is one of the most viable factors that come in handy in enabling the determination of your expectancy of life, and by extension, your premium.
Factors Determining the Cost of Life Policy
There are several more that are not related to how old you are that might likewise make your life insurance policy going to really throw you back, though:
- Medical Record: Your general health and medical history both can influence your life insurance premiums. A life insurance provider would usually require a medical examination as well as a medical checkup in order to be in a position to establish your risk profile.
- Lifestyle Habits: Some of your lifestyle habits, such as smoking or consuming excessive alcohol, may also contribute to your risk profile and hence your premium. A healthy lifestyle may see your premium reduced.
- Coverage Amount: The coverage amount that you would need would determine your premium. It is because the higher the coverage that you would need, the higher you would have to pay in premium.
- Type of Policy: Additionally, the kind of policy that one buys for one’s life insurance will also shape what one’s premium will be. More often than not, term life insurance is the least expensive type of policy to buy, then whole life insurance, and then universal life insurance, due to their life span coverage benefit and their cash value.
How You Can Lower Your Life Insurance Premium
Though life insurance may also be too costly for you to bear, then again you can cast your eyes towards a couple of strategies that would make the premiums cost for you come down such that life insurance is not that costly, and these are:
- Shop Around: Be certain you receive pricing from multiple insurance companies as prices can vary, and it is critical you have the best price on the insurance coverage you are seeking.
- Go in for Term Life Insurance: In case you are in search of a budgeted policy, then you should go in for term life insurance. It covers for a certain number of years and is considered to be the cheapest policy that one can go in for.
- Stay Healthy: Healthy persons have a low-risk profile in general, and that, in turn, states a reduction in premium. Stop smoking, take regular exercise, and control your weight.
- Choose a Higher Deductible: When you choose a higher deductible, your premium cost is lowered, but remember to be in a position that you can afford the deductible amount in case and when you get circumstances.
Conclusion
So, monthly expenditure by an average on life insurance depends to a great extent on many factors, but it can be very affordable with a decent approach and policy. The most affordable policy in this regard is term life insurance, and life insurance rates increase prominently with age. It is essential to be aware of the factors that are involved in determining your premium and then take the necessary actions to reduce the risk profile, like improving health and lifestyle habits. Shopping around and comparing quotes of different insurance companies can also fetch you the right price for your cover needs.
As a wise thing to do, buying life insurance is presented as an affordable peace of mind and financial safeguard for you and your family. Knowing what the average life insurance cost per month is and understanding the many factors that shall affect the cost of your premiums will guide you in choosing the right type and the right amount of coverage for you. It might not be that costly after all, so don’t let what you think is the hefty cost of a life insurance policy stop you from investing money for yours and your family’s future.
very interesting, but nothing sensible