The True Cost Of Life Insurance

What is the cost of life insurance?

The cost of your life insurance policy will depend upon many factors. If you wrestle alligators for a living, your premium will reflect the risky business you’re in. If you are a smoker or among the elderly, you will pay more for your policy than a non smoker would of age 26 will. In matters of insurance, like all other purchases you make in your lifetime, you usually get what you pay for. However, because the demographics of our nation are changing – the baby boomers born after World War II are retiring these days – there are many more products on the insurance market for senior citizens than ever before. People who were once thought to be uninsurable can now find coverage for themselves and their families.

What is the cost of Term Life Insurance?

A Term Life policy is one which is purchased to cover a specific period of time. This is typically the policy most often purchased by young families with small children and is meant to cover the financial burden which would fall upon survivors if the head of the household should meet an early end. This is typically the lowest priced policy. Term Life insurance does have fixed premiums and will sunset, or end, at the close of the term specified in the policy. Usually the end of the policy comes as the children graduate college and would no longer be dependent and your mortgage shall have been paid in full.

Of course, the amount you choose for the death benefit in the case of Term Life Insurance will dictate the amount of the monthly premiums. If you want your family to have $250,000 in the event of your death, you will probably pay $500.00 per year. Remember, other factors will come into play. If your health or lifestyle is at all risky, your policy premiums will reflect that.

What is the cost of Whole Life Insurance?

Whole Life insurance is designed differently than Term Life and is made to accomplish additional goals. Where the Term Life policy will pay a death benefit as detailed in the original policy, a whole life policy will accrue cash value over the years. That’s because, while the premium price is permanent and stays the same, the insurance company pays dividends on the cash value of your policy. Of course, a whole life policy is more expensive and, depending upon the rate and the original quote and the desired death benefit, should be thought of as an investment in addition to a safety net.

This policy has no sunset date. It will go on for as long as the monthly premiums are paid and may not be revoked should you be diagnosed with a serious medical condition. It is also available to borrow against in the event of a financial emergency or planned purchase like that of a home.

What is the cost of Universal Life Insurance?

As in most things which offer a possible financial reward, there is a larger risk to you, the policy holder, when you buy Universal Life Insurance. Until recently and unlike Whole Life Insurance, there were no guarantees in Universal Life Insurance. When you purchase this policy, the insurance company assumes, or projects a premium cost based on several factors including the performance of stocks and bonds. If, for some reason, those factors fall short, your premium may go up and you could even lose the cash value of your policy over time. On the other hand, as with any gamble, you stand to gain significantly. Recent developments in the insurance world make a guarantee on Universal Life Policies possible but, as you might expect, the cost of the premium will reflect that guarantee.

What is the average cost of Life Insurance?

With all the options, bells and whistles available to millions of Americans in life insurance policies, it is difficult or impossible to pin down the average cost of Life Insurance. Because your situation is uniquely yours, how much you pay for your insurance premium will depend upon you and the choices you make. That’s why it is critically important that you shop around.

Of course, your trusted insurance agent will be your sounding board but before you sit down with him or her, it’s a good idea to wade into the waters of Life Insurance on your own to gain as much understanding as possible. The internet is a wonderful resource which enables you to comparison shop to your heart’s content. The thousands of websites online often offer tools which allow you to compare several policies at once, giving you a more complete estimate of your costs and your benefits. There are cost estimators and expense calculators as well as other tools to help you project how much coverage will be adequate at the estimated time of your retirement.

A word to Seniors.

As mentioned above, a new world of insurance policies is opening up to you. These days your age is far less important to calculating your monthly premium payment than before. Even medical conditions which might have made you uninsurable a few years ago, no longer make low-cost insurance impossible to find. While you might pay a few dollars extra per month, there are insurance carriers which offer policies and adequate insurances with no medical exam required. That said, if you are lucky enough to be in good health and have no risky lifestyle issues, you might benefit by choosing an Insurance Company which requires a medical exam as a matter of course. In life insurance, as in other insurance products, the carrier rewards those who live their lives conservatively. The fewer risks you present in auto insurance or life insurance, the more likely you are to enjoy lower rates.

When it’s all said and done, the cost of life insurance  is up to you. If you shop around for the best quotes and rates, you are sure to find a life insurance policy which will meet your needs and protect your loved ones in the unhappy event of your death.

No related posts.