How much does life insurance cost?
In the market for life insurance and wondering how much it’s going to cost? You might be pleasantly surprised.
The cost of life insurance depends on what you buy, and there are a lot of options out there. But in general, people tend to overestimate the cost of life insurance. According to a recent study, people think term life insurance costs three times more than it really does, and younger Americans overestimate it by five times.
Life insurance is one of the most affordable ways to provide a major financial cushion for your loved ones. You pay a little, and your loved ones potentially get a lot later. So how little exactly? Let’s find out.
What affects life insurance cost?
So how much does life insurance cost? Your price depends on a number of factors, including:
- The type of insurance. If you’re looking to save on the cost of life insurance, try term life, which is less expensive than permanent life insurance. Term life lasts for a specific amount of time, usually 10 to 30 years, while permanent life lasts your entire lifetime and also builds cash value.
- How much coverage you buy. A larger death benefit usually means a larger monthly payment, and if you choose term life insurance, a longer term length means a bigger payment as well.
- Personal factors. Health, age, and lifestyle all play a role in your life insurance rates. Waiting to buy will always make it more expensive later. Women also pay a little less than men in general because of their longer life expectancy.
- The company you choose. Every insurance company has different underwriting standards, which means they use different formulas to calculate your price for life insurance. That means you can get two different prices from two different companies for the same type of policy, which is why it’s smart to shop around.
eFinancial is committed to making life insurance affordable for everyday families, so we can help you compare costs and other policy features from multiple companies to help you find the best fit.
What’s the average cost of life insurance?
So how much does life insurance cost on average? Here are a few examples of the average cost for a term life policy:
For a 30-year-old woman in excellent health:
- A $250,000 10-year policy will start around $10 to $15 per month
- A $500,000 10-year policy will start about $20 to $25 per month
For a 30-year-old man in excellent health:
- A $250,000, 10-year policy starts about $10 to $15 per month
- A $500,000, 10-year policy starts around $20 to $30 per month
For a 40-year-old woman in excellent health:
- A $250,000 10-year policy starts around $15 to $20 per month
- A $500,000 10-year policy starts around $20 to $30 per month
For the cost of just four lattes from your favorite coffee shop, a 30-year-old can buy a 10-year, $250,000 term life policy. By finding room in your budget now for life insurance, your family can count on a much bigger payout later if they need it.
Still have questions about life insurance costs?
At eFinancial, our goal is to make life insurance simple, affordable, and understandable for everyday families. This content is intended for educational purposes only. Each post is carefully fact-checked, reviewed and updated regularly to ensure the information is as relevant as possible.