How much does life insurance cost

Life insurance is one of those necessities of life that many people never consider. However, it is a vitalinstrument to include in financial planning for the future. The actual cost of life insurance will depend on many factors such as the type of the policy, age, existing health factors like obesity, smoking, depression, heart disease, high cholesterol and many more. One other factor that will likely determine your individual cost for life insurance includes the actual company where you purchase the policy. Before you choose a life insurance carrier or more specifically, a policy, it is important to compare several different plans and choose the one that best fits your own individual needs regarding coverage and cost.

Your age is likely the most important factor used by insurance companies in determining what your premiums will be. It simply makes sense that the older we get, the more likely we are to die. Elderly people, for this reason, will pay much higher premiums for life insurance than someone who is just graduating high school or college. Insurance carriers consider younger people to be a much lower risk than older individuals. They have a much better chance when insuring younger people of not having to pay out the life insurance policy for several years. As you grow older, the premiums for your life insurance coverage will likely increase unless of course you opt for a policy that has a locked in premium. Permanent life insurance guarantees that your premium will never increase while term life insurance rates tend to increase each year as the insured gets older.

Another factor in determining your policy rates is your health. Those who have a history of health issues such as diabetes and heart disease will likely spend considerably more each year on life insurance premiums. Someone who smokes can expect to pay a higher premium as well. Many life insurance companies will insist that you receive a physical examination from your physician prior to writing up the policy, just to rule out any existing conditions that may cause death at a younger than average age. In order to see lower rates for your life insurance, it is helpful to live a healthy lifestyle, quit smoking, drink only in moderation and see your doctor regularly to rule out any long-term illnesses that have not yet been diagnosed.

The type of life insurance coverage that you choose will also have an effect on your premiums. Term life is the most basic type of life insurance and is typically the least expensive as well. The length of your policy will determine your premiums. Generally when you choose a longer term, your premiums will be higher. While permanent life insurance is typically much more expensive than term life insurance, the premiums can be considerably lower if you are planning to keep the coverage for a long period of time. Permanent life insurance rates are locked in and do not change as you grow older. Although it may be a bit more expensive in the beginning years of the policy, the rates will stay the same for the life of the policy. This can save you a substantial amount of money in your later years when term life policies tend to be much more expensive.

Finally, your insurance company itself plays a role in what you can expect to pay for life insurance coverage. Different companies have different rates. Keep in mind that the goal for insurance companies is to make money and depending on the company that you choose, the rates may be significantly different from other carriers. This is why it is an excellent idea to compare several different companies before you ultimately choose the one who will write your policy. Keep in mind as well that companies charging the cheapest rates are not always the best choice. It may be better to go with a trusted and well-known company even if their rates are a bit higher, since you have the security of knowing that trusted companies will actually have the ability to pay out the proceeds of your life insurance policy when the time comes to do so.

Last updated on May 25th, 2010 and filed under Health Insurance. Both comments and pings are currently closed.

Comments are closed