The reason why most people choose term life insurance over other life insurance policies is because it is incredibly affordable. For less than the cost of your fast food bill each month, you could get thousands of dollars in coverage to pay for your final expenses. How much will term life insurance cost? That depends on a variety of factors associated with your situation. As you begin to analyze these factors, you will see what your rates may be. Let’s take a closer look at the cost of term life insurance to see what you may have to pay.
The Easy Way to Calculate Insurance Costs
The simplest way to see how much your term life insurance will cost is to use an insurance calculator. This will let you see how much insurance you need and how much it may cost you from different insurance companies. Compare the rates and coverage plans from these companies and select the one that is right for you. No calculations necessary.
Factors that Determine Term Life Insurance Premiums
By understanding the determining factors for term life insurance premiums, you can make adjustments to get the best rates possible. Some of these factors are beyond your control, but they all have a say in what you will pay. Examples include:
- Age: The older you are, the higher your term life insurance premiums are going to be. That is because you are more at risk of needing to use your policy than a young person would be. Some insurance companies stop taking applicants altogether after a certain age.
- Term period: Longer terms typically lead to higher premiums because they lock you into a low rate for a longer stretch of time. You will save money in the long run by getting a long policy, but you will pay more each month than you would with a short term plan.
- Policy value: As you may expect, a high dollar life insurance policy is going to come with high premiums. You need to get enough insurance to cover your final expenses, so just be prepared to budget a little more money if those expenses are high.
- Health: Healthy people have low term life insurance rates because they are much less likely to pass away. If you have diabetes, heart disease, high cholesterol, or other health concerns, you will have to pay more for your insurance than most other people.
- Lifestyle: Your life habits also have an impact on your life insurance rates. Smokers, drinkers, and people in high-risk careers often pay high premiums because of the danger they put themselves in daily. If you can cut unhealthy habits before applying for term life insurance, you will get a much lower rate to enjoy.
- State: Some states charge more for term life insurance than others because of the way their economy is run. If you are in an affluent state like California, Nevada, or Utah, expect to pay more than you would in states like Oklahoma or Texas.
- Insurance company: Last but certainly not least, the insurance company you work with will have a major say in how high your insurance premiums are. That is why it is important to compare policies to get the best rate possible.
How to Lower Your Life Insurance Premiums
It’s impossible for us to answer the question “How much will term life insurance cost?” because there are so many determinants that go into that. We can, however, give you some tips to help you lower the amount of money you pay each month.
You can start by making sure you are as healthy as can be before applying for life insurance. Most insurance companies will require you to go through a brief medical exam before assigning you a rate. If you have low blood pressure, low cholesterol, and a weight within the proper range for your gender and height, you will be able to lock in a great rate early on.
Another way to save money on term life insurance is to get a short term policy. This is not ideal for the long term because you will most likely pay a higher rate when you renew your policy. Nevertheless, this is something to think about if you just can’t afford to pay much each month. If your situation is going to change in the future and allow you to pay more, this may be the best solution for you.
Of course, you could also lower the amount of life insurance you get altogether. Before doing this though, make sure you do not put your family in a bind because of that. Make sure they have enough to cover outstanding debts you may pass onto them, as well as enough money to cover the cost of your burial. As long as your policy is sufficient, you should be set for the future.