How much a life insurance policy will cost you depends on a number of factors, including how much insurance you need, how old you are, your health and lifestyle factors. Life insurance premiums could cost as little as a couple hundred dollars a year or several hundred thousand.
One of the biggest factors determining how much life insurance costs is the size of the policy. Generally, the larger the policy, the more the premiums will be. A policy with a $500,000 benefit will cost more than a policy that pays out only $250,000, for example.
Another big factor in how much you pay for life insurance is whether you have a term policy or a whole life policy. A term life insurance policy covers you for a certain period of time, such as 30 years. During the term your premium will stay the same, but once the term is up, your insurance will no longer be in force. Term life insurance is a good way to get cheaper life insurance, especially for younger people who are unlikely to die during the coverage period.
Whole life insurance is insurance that stays in force for as long as you pay your premium. This type of insurance often has an investment component and builds up a cash value from which you can borrow. Whole life is much more expensive than term life insurance and is often a better choice for older people who need a small policy to cover funeral expenses.
While the size of your policy and what kind it is play the largest roles in how much your life insurance costs, there are other factors that insurers consider.
For example, the older you are, the more expensive your insurance premiums will be. If you get a 30-year term policy when you are 20 years old, the premiums will be less than if you get the same policy when you are 30 years old. This is because your risk of dying during the term will be greater. With most whole life policies, your premiums will increase as you age.
Health also plays a role in how much you pay for life insurance -- not just yours but your ancestors' as well. If you have a family history of heart disease, diabetes or cancer, you may pay more for life insurance, even if you do not currently have any of those diseases. If you have high blood pressure or high cholesterol, you will likely pay higher life insurance premiums.
Another factor that plays a role in life insurance costs is your lifestyle. If you smoke or heavy drinker, you will likely pay higher rates. You may also have to pay higher rates if you engage in high-risk activities, such as skydiving, driving a race car or piloting your own plane. If you have a dangerous job, it could also affect what you pay.
The best way to find cheaper life insurance is to shop around, and the easiest way to do that is to use an online comparison website. Such sites allow you to plug in dozens of variables and get instant life insurance quotes from numerous life insurance companies, allowing you to find the plan that best fits your needs.
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