How Much Does Life/ Death Insurance Cost?

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It is quite hard to put a price tag on peace of mind because that is what life/death insurance policy will give you and your loved ones.  Since the policy rates are mostly tailored to individual needs, life/death insurance quotes can vary significantly from one person to another.

This makes it difficult to establish a specific average monthly cost for a life insurance policy. However, we can give you a general idea of the typical life insurance costs for a few demographics.

But before we discuss the figures, you need to understand some of the critical factors that will affect your life/death insurance quotes.

Critical Factors That Affect Your Life/Death Insurance Quotes

Life insurance companies categorize potential clients by how risky they are to insure based on a wide range of factors.  We have identified the top seven factors that will play a crucial role in determining your monthly premium.

1. Age

It is no surprise that the #1 factor behind your life insurance quote is age.  With all other factors constant, the younger you are, the lower your rate because there is a high probability you will be paying the insurance company for many years before they have to worry about writing your loved ones a check.

Even though it is always a good idea to take a life insurance policy before it is too late, it doesn’t mean you need one right after university if you don’t have financial dependents.

The good thing is that you will never be too old to purchase a life insurance policy because there are many options out there that will ensure you and your loved ones have the right coverage regardless of your age.

2. Gender

After age, most insurers use gender to determine life insurance rates. Most companies use complex statistical models to estimate how long someone with a specific profile might live.

Over the years, it has been established that women live approximately five years longer than men. Since women are usually paying the premiums for a slightly longer period than their male counterparts, they enjoy lower rates. Sorry guys, but that is the reality!

3. Health

In most cases, you will be required to go through a medical examination before the insurer determines whether or not to insure you. During the medical examination, the company will be interested in your height, weight, pre-existing medical conditions such as high blood pressure, diabetes, and other health concerns that might be signs of future problems.

Some insurers may also require an electrocardiogram to check the general condition of your heart. Depending on the results of the medical examination, an insurance company may decline to underwrite your policy.

Therefore, if you have pre-existing medical conditions such as diabetes and high cholesterol, ensure they are managed properly before you start searching for life insurance coverage. This can help you to obtain competitive life/death insurance quotes.

Although some companies offer guaranteed-issue life insurance policies (no medical examination required), expect to pay more.

4. Family medical history

There isn’t much you can do about your genes. Unfortunately, a family history of cancer, stroke, diabetes, or other severe medical conditions may predispose you to these illnesses and lead to relatively higher insurance rates.

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Life insurance providers are usually interested in any conditions your siblings or parents have experienced in the past, particularly if the condition contributed to premature death. However, some providers emphasize your family’s medical history more than others.

5. Occupation

Insurance companies classify some occupations as risky. For instance, if you are a race car driver, the provider will see your job as a bit risky, leading to higher rates.

Depending on how risky your occupation is, providers may quote higher amounts for your monthly premium or refuse to cover you altogether because you carry a substantial risk of accidental death.

6. Smoking/drinking status

Since smoking and drinking are linked to a wide range of health complications, smokers and drinkers are always asked to pay more for a life insurance policy. However, if you quit smoking or drinking, you may qualify for lower rates within a year- another good reason to quit smoking, right?

7. Hobbies

Your hobbies can also determine how much you pay for your life insurance policy.  Some high-risk recreational activities such as hang gliding, skydiving, scuba diving, and rock climbing may increase your life/death insurance quotes.

The good news is that every life insurance company is different and where one company may consider your hobby risky, another one may not. Therefore, it pays to shop around and obtain multiple quotes before you make up your mind.

A Simple Illustration of the Cost of Life Insurance

To help you understand the average cost of a life insurance policy, we will use a simple real-life example to illustrate how things work.

So, a healthy 30-year-old man who buys a 20-year term policy with a fixed annual premium might be required to pay between $450 and $500 to secure a $500,000 death benefit.  This translates to monthly premiums of between $37.5 and $41.7.

However, a healthy 50-year-old who purchases the same policy might be forced to pay between $1300 and $1500 per year for the same amount of death benefit. This translates to about $108.3- $125 per month.  If he waits until he is 65, the same policy will cost about $7,500 per year or $625 every month!

Premiums for cash-value policies are slightly higher. For instance, the healthy 30-year-old man paying $450 per year on a $500,000 term life insurance policy will pay approximately $4,400 a year for a $500,000 universal life policy because a specific portion of the $4,400 goes to the investment component of the life insurance policy.  That is a significant difference.

Final Word

Life insurance rates are usually personalized, and rates can vary wildly from one person to another. When you request life/death insurance quotes, the insurance company will take your age, health, gender, occupation, and family medical history into account.

To ensure you are getting the best deal in the market, contact our experienced insurance agents today and let us help you compare quotes.

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