How much does life insurance cost? ~ Auto accident attorney

How much is life insurance? The answer is … it depends. The average cost of life insurance varies, depending on what type of policy you choose and how much coverage you sign up for. It also depends on your health, how old you are when you sign up for the policy and whether you sign up for any life insurance policy riders.

Still, we’re happy to report that, in many cases, a term life insurance policy will cost less per month than a pair of tickets to the latest blockbuster movie (with popcorn). Or a new sweatshirt. Or any of the six other items on this list of eight everyday expenses that cost more than term life insurance.

This means that life insurance can be an affordable part of nearly any budget. The average life expectancy in the United States is 78.6 years, according to the Centers for Disease Control and Prevention, but you don’t buy life insurance because you’re hoping to beat the average. You buy life insurance because you want to plan ahead and help ensure your parents, partners or children have the money they need to cover your funeral costs, pay off your outstanding debts, maintain their standard of living without your income and achieve dreams like graduating from college.

And if you buy life insurance right now, you’ll save money. (That isn’t a sales pitch. That’s math.)

Here’s what you need to know about the cost of life insurance and how to choose the best affordable life insurance policy for you and your loved ones.

Why getting life insurance now could save you money

If you’re reading this, you’re probably thinking about purchasing life insurance. When you’re done reading this, you might start thinking about what you’re going to have for dinner or what you need to finish up at work before you can go home.

Then you’ll tell yourself that you’ll think about life insurance later. Maybe when the kids are a little older. Maybe when you have kids — because people without kids don’t need life insurance, right? (Wrong.)

Here’s why putting off the life insurance decision could turn out to be an expensive mistake.

Life insurance premiums are less expensive if you start the policy when you’re young

Let’s say that you, like me, are a 37-year-old woman in excellent health. If someone like me were to take out a 20-year, $500,000 Haven Term policy, issued by MassMutual, I’d pay $22.91 per month to protect my loved ones. That’s $274.92 per year or $5,498.40 over the life of the policy.

Now let’s say you’re a 47-year-old woman in excellent health. If you took out a 20-year, $500,000 Haven Term policy, issued by MassMutual, you’d end up paying $49.61 per month. That’s $595.32 per year or $11,906.40 — more than twice the cost.

When you’re considering life insurance, it pays to be an early adopter. Term life insurance premiums are less expensive when you’re young, so if you’re going to become an insured person and help your beneficiaries cover everything from your children’s college expenses to your own funeral costs, make a plan to get life insurance right now.

Like, this week. (You can do it!)

But before you start filling out our online life insurance calculator and getting life insurance quotes, we need to discuss what types of life insurance are available and how they might fit into your budget.

Choosing the right type of life insurance for your budget

There are a lot of different types of life insurance out there, and keeping track of all the different variations can be confusing. That’s why we’ve put together this super-easy chart to help you keep track of your options:

Term life insurance is designed to cover you for a designated period of time, like 30 years. It comes in two common types:

Medically underwritten term life insurance: A good choice for people who are in generally good health and save on premiums
Simplified issue term life insurance: A good choice for people who aren’t in generally good health; your life insurance rates will be a little higher, but you’ll still be able to protect and provide for your beneficiaries

Permanent life insurance covers you for the entirety of your life, is much more expensive than term life insurance, and comes with a “cash value” element that can be used to cover premium costs or borrowed against as a policy loan. It comes in two common types:

Whole life insurance: Permanent life insurance that provides coverage for your entire life
Universal life insurance: Permanent life insurance in which monthly premiums and insurance coverage can be customized over time

We’ll take a look at each type of policy in more detail (just keep scrolling) but when you’re asking yourself “how much does life insurance cost?” keep in mind that in many cases, a cost-effective term life insurance policy will be the best choice for both your personal needs and your budget.

Why? Because the purpose of life insurance is to help ensure your partner and dependents have the income they need to cover living expenses, children’s college costs and to make sure your loved ones have enough money to pay for the funeral and other final expenses. To do that, your insurance policy needs to come with a death benefit that ensures your beneficiaries are taken care of.

But your beneficiaries’ needs will change over time, which is why term life insurance is often the best option. Taking out a term life insurance policy that covers you until retirement age, for example, means that you can protect your family from the loss of your income while you’re still earning that income — but once you’re done earning and have begun living off your retirement accounts, your family may no longer need that life insurance policy.

Let’s take a closer look at the various types of life insurance.

Term Life Insurance

Term life insurance comes well-recommended by financial experts because of its affordability. As the name suggests, this type of life insurance covers you for a set period of time (the “term”). Common term lengths are 10, 15, 20 and 30 years. Typically, this is during the years your family needs it most — until the mortgage is paid off or the kids are no longer financially reliant on you.

Remember, even if you don’t have a partner or kids of your own, you should still consider a term life insurance policy. Becoming an insured person who can provide a death benefit to designated beneficiaries such as parents or siblings means taking the stress off your family and extended family as they deal with your final expenses or unpaid debts, including co-signed student loan debt. (Do you want your parents to get stuck paying off your student loans? They may still be paying off their student loans.)

Further, life insurance can give your beneficiaries the option of receiving their insurance benefits in the form of an annuity, which provides long-term financial protection.

Term life insurance comes in a couple of different types:

Medically Underwritten Term Life Insurance

If you’re decently healthy, medically underwritten term life insurance is often one of the most affordable types of coverage. The premium pricing is personalized to you (hence the term “medically underwritten”) therefore it’s based on factors like your age, physical health, gender and lifestyle choices such as smoking.

With Haven Life, you can easily apply online for this type of term life insurance. If approved, you can start coverage that day. In most cases, you’ll need a medical exam to finalize coverage, which can be taken at a time and place that’s convenient for you.

There are some cases where a medical exam will not be needed thanks to advancements in underwriting technology, which is determined based on eligibility and the information in your application. Keep in mind: It’s essential to be honest when completing the application. The issuance of the policy or payment of benefits may depend upon the answers given in the application and their truthfulness. (In other words, if they find out you lied about some aspect of your health, they could kick you off your policy and/or refuse to pay out your beneficiaries.)

Estimates for medically underwritten term life insurance

30-year, $250,000 policy for a 37-year-old woman in excellent health: $27.43 per month
30-year, $500,000 policy for a 35-year-old man in excellent health: $41.42 per month

Not sure how much life insurance coverage you really need? Try calculating your needs.

Simplified Issue Term Life Insurance

Simplified issue life insurance is a type of term life insurance policy that does not require a medical examination or medical underwriting. That can make it an attractive option for those who have a health condition that may be an obstacle to obtaining medically underwritten coverage. These policies are typically limited in coverage amounts of $250,000 or less. Occasionally, you can find a $500,000 policy.

The convenience of avoiding medical underwriting comes at a cost since there are more risk factors involved. Insurers issue policies without fully knowing how their applicants’ health histories might affect their life expectancy, so they’re assuming more risk — and their life insurance premiums reflect this increased risk. As you’ll see below, many simplified issued policies cost at least twice as much per month than medically underwritten policies.

Estimates for simplified issue term life insurance

$250,000 policy for a 37-year-old woman in excellent health for a 30-year term: $56 per month from Phoenix Life Insurance Company
$500,000 policy for a 35-year-old man in excellent health for 30 -year term: $105 per month from Phoenix Life Insurance Company, Inc.

(Source: TermLife2Go)

On that note: whenever possible, try to choose a choose a policy that comes with a monthly premium or annual premium rate that lasts for the duration of the policy. This helps ensure that your policy will stay affordable over time.

Permanent Life Insurance

Permanent life insurance is a type of coverage that lasts for the remainder of your life. (Technically, term life insurance could also last for the remainder of your life; it’s just that you, your loved ones and your insurer are all hoping that it won’t.) Instead of paying for coverage for just 20 or 30 years, like you might do with a term life insurance policy, a permanent life insurance policy ensures that you’ll have life insurance coverage until you die, so long as the premiums are paid.

Permanent policies also have cash value that can increase over time. Here’s how this works: in a term life insurance policy, your premium payments go towards the death benefit your beneficiaries receive if you die before the term is up. In a permanent life insurance policy, part of your premium payments go towards the death benefit and the rest of the money helps build “cash value.” This money can be left to accumulate, withdrawn, borrowed against, used to pay future premiums, transferred to the death benefit, etc. However, when you die, your beneficiaries receive the death benefit, not the cash value.

Because of the lifelong coverage and cash value component, a permanent policy costs much more than term life insurance, which can make them cost-prohibitive. On the flip side, a permanent policy might be a good option for those who want life insurance to be part of their long-term financial strategies.

Whole Life Insurance

Whole life insurance is substantially more expensive than term life insurance, with one estimate finding that whole life insurance is 5 to 20 times more costly than term life insurance. If your family is younger or cost-conscious, permanent life insurance may not be as attractive as a term life policy, where the average cost is significantly cheaper.

Estimates for whole life insurance:

$250,000 policy for a 37-year-old woman in excellent health: $ 277.32 per month
$500,000 policy for a 35-year-old man in excellent health: $561.59 per month

(Source: State Farm Insurance)

Universal life insurance

Universal life insurance is similar to whole life insurance (that is, it lasts for your lifetime and has a cash value), but with a twist. Universal life insurance can vary throughout your life with respect to the amount of your premium and the amount of your death benefit.

This means that as you age and your needs change, you may choose to change the terms of your policy. For example, you may opt for lower premiums earlier in the policy while your income is still growing and then opt for a lower face value later in life, when you have fewer financial obligations to cover. Universal life insurance has numerous other “customizable” options, making it a more complex product that often requires the assistance of a financial professional to manage.

Estimates for universal life insurance:

30-year, $250,000 policy for a 37-year-old woman in excellent health: $104.90 per month from Prudential Life Insurance Company
30-year, $500,000 policy for a 35-year-old man in excellent health: $ $220.90 per month from Prudential Life Insurance Company

(Source: AccuQuote)

Factors that affect the cost of life insurance

If you’ve been paying attention to those estimates we just listed, you probably noticed that there’s no single answer to the question “how much does life insurance cost?” There are literally dozens of potential answers. Your life insurance rates will be determined by several unique factors, starting with the two big ones:

Whether you want term life insurance or permanent life insurance
How much coverage you’d like your dependents and beneficiaries to receive in their death benefit ($100,000? $250,000? $500,000?)

Here are a few more factors that go into the cost of your annual premium:

Age
Gender (women usually have lower premium prices than men)
Occupation
Health history
Family health history
Lifestyle choices like smoking, drug use and even multiple motor vehicle infractions (which means that being a responsible driver could save both your life and your life insurance costs)

You won’t be able to cut your life insurance rates by, like, getting younger (the fountain of youth has yet to be discovered) but there are a few ways you can save money on your life insurance policy — and many of them are relatively easy to implement.

How to save on life insurance

Choose the type of coverage you need

The type of life insurance you purchase has a significant impact on the amount you pay for coverage. Simplified issue may come with the convenience of “no medical exam,” but that convenience comes at a price. Whole life lasts for your entire life and has a cash value feature but can be too costly for cash-strapped individuals. Medically underwritten term life insurance offers affordable pricing but only lasts for a certain number of years.

Buy the right amount of coverage

Don’t pick a coverage amount at random. The more coverage you need, the more you’ll pay for your life insurance policy — so be thoughtful about your coverage choices. If you really only need $500,000 to adequately cover your mortgage, for example, there is no reason to increase your monthly premium by selecting a $1 million policy; if it’s a 30-year mortgage, taking out 50 years worth of life insurance coverage might not make financial sense. A life insurance calculator can help you determine the right amount of coverage for your financial situation.

Don’t put off buying a policy

Remember: if you get your policy while you’re younger (and healthier), you are going to reap the advantage of a lower premium. This is one of the easiest and best ways to save money on life insurance — but that’s not the only reason to get a life insurance policy while you’re young. We’ve got a list of eight reasons to get life insurance in your 30s, including “to protect your small business” (if you’re a freelancer or entrepreneur), “to cover final expenses” (if you’re… um… mortal) and my favorite reason, “to get it over with.”

Choose a healthy lifestyle

A non-smoker will enjoy significantly lower premiums than a smoker — so quitting smoking will be good for both your health and your wallet! (Most insurers require at least one to two years smoke-free before you will be classified as a non-smoker for underwriting purposes.)

Making healthy eating choices can also help lower your BMI, blood pressure and cholesterol — all of which will be taken into consideration when you buy medically underwritten term and permanent life insurance policies.

And don’t forget about sleep. Getting a good night’s sleep can reduce stress levels, boost your immune system, help you make healthier choices during the day and give you more relaxed quality time with those loved ones for whom you’re taking out that life insurance policy.

What Haven Life customers are saying:

Nicole Dieker is a full-time freelance writer. Her work regularly appears on Bankrate, Lifehacker, The Write Life and numerous other sites. She is the author of Frugal and the Beast: And Other Financial Fairy Tales. This article is sponsored by Haven Life Insurance Agency. Opinions are her own.

Haven Life Insurance Agency offers this as educational only, and the information provided is not written or intended as specific legal advice. Haven Life Insurance Agency does not provide legal advice. Individuals are encouraged to seek advice from their own legal counsel.

The post How much does life insurance cost? appeared first on Blog | Haven Life | Life insurance & Personal Finance Tips.

from Blog | Haven Life | Life insurance & Personal Finance Tips https://ift.tt/2FcQu7u

About Admin MC3

This is dummy text. It is not meant to be read. Accordingly, it is difficult to figure out when to end it. But then, this is dummy text. It is not meant to be read. Period.

Auto accident attorney