As you probably know, life insurance can be expensive. There are several types of policies and coverage options to consider when purchasing a policy. To help you find the perfect balance between average cost of life insurance and coverage, we’ve put together this guide to average cost of life insurance for individuals in various stages of their lives.
- What is life insurance?
- Types of life insurance
- How much life insurance do you need?
- How much does life insurance cost?
What is life insurance?
Life insurance is a term that’s often used interchangeably with “monthly premiums”, and they’re two of the main ways in which life insurance policies are sold. In actuality, however, the term life insurance refers to two very different categories of products: term and permanent life insurance.
Term life insurance (also called term life insurance or whole life) refers to a broad range of life insurance policies designed to provide benefits to policy owners for a specific period of time. Term life insurance policies last for as long as the insured person lives (or survives), and can either be paid monthly or at one-time premium intervals.
Types of life insurance
There are several types of life insurance, and this article focuses on two of the more common: term life insurance and permanent life insurance. Term life insurance refers to a policy you purchase to protect you from the long-term effects of an unfortunate event. Usually, this coverage can last from 5 to 30 years. Generally, the longer the term of the policy, the lower the annual premium. This can vary depending on a variety of factors, so you’ll want to check out your policy to see what it covers. Permanent life insurance is a type of coverage that provides for lifelong protection to family and friends in the event of your death.
How much life insurance do you need?
You might wonder how much coverage you really need. There are two different ways of looking at this. The first way of looking at this is the “very minimum” amount of life insurance you need. The other way is a “stretch” estimate of your coverage you should have. In the United States, the very minimum coverage you need is 100% of your annual income. If you’re single, this is the amount of coverage your family would receive if you died at any point in time without a will.
The average cost of life insurance coverage for a family of four is $150,000. For a family of six, you’d need $400,000. Each state also has their own minimum amount of coverage required. Some states require a minimum coverage amount of $1 million.
How much does life insurance cost?
In general, the cost of life insurance is dependent on many factors. You can find an estimate of the cost to your household based on these factors in our free cost of life insurance estimator. Who can get life insurance? The type of life insurance you need will vary based on your age, lifestyle, and other factors. Life insurance is typically available only to: Recent college graduates who have just graduated Parents with minor children under the age of 17 Relatives of recently deceased Individuals who have a pre-existing medical condition Advance approval is required
The average cost of life insurance policy depends on the person and how old they are, as well as the type of life insurance policy they choose.
When choosing life insurance, most people focus on the coverage levels of the policy. There are some other important factors to consider, like the premiums and the waiting periods before coverage kicks in. If you’re just beginning to consider life insurance, consider the cost of a traditional term life insurance policy, but if you already have a policy, you should also consider any possible waiting period changes or premium increases.
To know more about life insurance, check out Phoenix Life Insurance Review.