How Much Does Life Insurance Cost?

Life insurance is designed to make sure that spouses, children and other loved ones are financially protected if there is an untimely death.  Life insurance costs are dependent on many factors including age, health, the type of policy and medical history.  There are also different types of life insurance and amounts of coverage available for potential policy holders.

Term Life Insurance Costs

Life insurance costs for term life insurance tend to be cheaper because the coverage is for a defined period of time.  It is usually a 10 to 20 year term and there may be an option to renew at the end of the policy limit.  If the policy price remains the same, this is known as a renewable guarantee.  This is ideal for young families who cannot afford high insurance premium prices.  In addition, term life insurance only pays a death benefit to the beneficiary and does not gain value over time.

Whole Life Insurance

Whole life insurance works a little differently.  While death benefits are paid if there is a claim, this type of insurance is also an investment and there is a cash value.  The premium rates are invested in a money market fund or bonds and policy holders can borrow against the cash value.  Whole life insurance tends to be more expensive than term life insurance.  However, it is still possible to get cheap life insurance with a whole life insurance policy.

Pricing for Whole Life Insurance

The average amount of coverage for a whole life insurance policy is 250,000.  This coverage can range in cost from $1200 to $2000 a year depending on the individual, the insurance company and the criteria involved.  The plus side of the payments is that part of the cost of the life insurance goes towards the cash value of the policy.  This means that over time the cash value will continue to increase.  Whole life insurance policies also have administrative fees and commissions associated with them.

Pricing for Term Life Insurance

Term life insurance is priced based on similar criteria to whole life insurance, but it is much more budget friendly.  this is particularly true for those who are young and in good health. The average term life insurance policy is $250,000 with a 10-20 year term.  This may cost between $300 and $500 a year.  In addition, there will not be additional costs beyond the premium.   The renewable guarantee is also often included in this price.  When looking for cheap life insurance, term life insurance is often the best option.

Life insurance costs can be a factor when determining which policy is the best fit.   Understanding the differences between whole life insurance and term life insurance can help explain the costs involved.   Getting a quote to find the best life insurance premium costs can protect your beneficiaries financially if you die.  Enter your information into our online form and find out how much you could be saving on life insurance costs today.

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