Life insurance can be an excellent way to protect your family’s financial future in case you die unexpectedly. It’s natural to be hesitant about getting life insurance coverage since it’s not something you’ll use during your lifetime. The death benefit is only available after the policyholder’s death, and even then, high premiums make this policy out of reach for many.
However, not getting life insurance coverage means taking a huge gamble on your loved ones’ future. So, what is the real cost of life insurance? Is it worth it? Let’s find out.
It’s Not as Expensive as You Think
What do you estimate the premiums for a 30-year-old to secure a policy with a death benefit of $250,000? Roughly 50% of the people asked this question gave a yearly salary of $1000 as their best estimate. Was your guess in the same ballpark? Well, you’ll be surprised and perhaps relieved to know that the real cost is closer to $160 yearly, or about $12 per month.
Premiums will Increase Due to Health Concerns
The costs above are for a healthy, non-smoking individual. It will cost you significantly more if you smoke or have preexisting health conditions. Life insurance premiums for smokers often double by the time they reach age 45 and may approach triple that amount for those who start smoking at an older age.
Smoking has devastating financial and health consequences. If you’re required to pass a medical exam (life insurance exam), you can be denied coverage based on poor health.
Higher Savings with Whole Life Insurance
Term life insurance premiums will be significantly more affordable, but the coverage will not include a savings component. As opposed to term life insurance, which only covers you for a certain number of years, whole life insurance protects you for the rest of your life and allows you to accumulate savings in cash value.
It Also Depends on the Type of Life Insurance Policy
There are various life insurance policies, and their cost differs depending on the duration, coverage amount, and associated risk. Term life insurance is designed to insure policyholders for a predetermined time frame. This is why term life insurance is more cost-effective than other options.
Due to its long-term protection, many people choose to invest in permanent life insurance, such as whole life or universal life. As a result, the insurance provider is much more inclined to pay the death benefit than they would under a term policy. Premiums are typically higher to account for the greater risk associated with permanent life insurance.
Gender and Age Factors Affect Your Rate
Insurers view male applicants as more risky than female ones since men, on average, have a statistically shorter life span. Hence, men tend to pay a higher premium for life insurance than similarly aged and healthy women.
Life insurance premiums also tend to increase with age since age is a reliable predictor of mortality. The best time to purchase life insurance is while you’re still young and healthy enough to take advantage of a more affordable premium.
The True Cost of Going Without Life Insurance Coverage
The cost of insurance becomes clear when you weigh it against the consequences of being uninsured in the event of death. If you do not have enough money saved to maintain the same standard of living for your spouse and children, their lives may have to be radically altered.
That’s why people buy life insurance in the first place. There’s a chance you’ll rack up a lot of medical costs before you pass away, which means your loved ones will have to pay for your final care and burial expenses in addition to dealing with the financial burden left by those bills. A lot of money may be needed for that. And they could have to find a new home if they can’t afford to stay put.
Want to find out how much life insurance will actually cost you? Discuss your needs with our experienced insurance agents at Franklin Life and Annuity, and they will find a life insurance policy that fits within your financial constraints. We work with the most reliable life insurance companies in Houston, TX, to make sure you get affordable yet comprehensive coverage.
Contact us right away to speak to one of our representatives.