There are many factors that go into determining how much life insurance costs. And the answer will change for each individual and how he or she fills the various niches provided by insurance carriers. At TermLife2Go, we focus on placing our clients with the best life insurance companies and best no medical exam companies in the marketplace. By aligning each client with the most appropriate company we are able to save our clients on the cost of life insurance. Give us a call today to see what we can do for you!
Determining how much life insurance costs
Clients often ask us, “How much is life insurance?” We usually reply by stating that it will depend on several factors. Some clients will follow up this question with, “Well, I am just looking for a quote. What’s my quote?” And once again we must reply that the cost of life insurance depends on several factors.
You see, we are not trying to dodge the question out of fear that you will not like the answer. Quite the contrary, it is only by finding out certain factors about our clients that we can properly assess and accurately quote them. To do anything less would be both dishonest and lazy.
As a result of this common back and forth conversation with our clients we decided to put this article together that can help answer how much is life insurance. See our best life insurance rates by age chart for rates on various age brackets.
6 Factors to consider in Deciding…
There are 6 factors to consider when determining how much life insurance will cost you. Each of these factors carry a significant weight with the life insurance companies when it comes to your premium.
The 6 categories that answer how much does life insurance cost:
To understand the factors that go into determining the cost of life insurance, the first thing to talk about is the different types of life insurance.
Term life insurance is a type of life insurance where the insured is covered for a period of time, typically 10-30 years. The face amount and premium (how much the life insurance costs) are fixed for the term. After the life insurance term ends most policies can be renewed annually until the age of 95. However, each year the policy is renewed the premium will go up. The advantage of term is that the premium is typically much less than whole or universal life insurance. The disadvantage is that the term ends and it is usually cost prohibitive to keep renewing annually.
Whole life insurance lasts your whole life. The premium and face amount stays the same. Whole life builds cash value. There are typical whole life policies for healthy individuals in the form of exam and no exam policies. There are also guaranteed issue and simplified issue whole life policies that are typically reserved for final expense or burial insurance.
Universal Life insurance is similar to whole life in that it lasts the rest of your life but has more flexible premiums. Universal life comes in a guaranteed version where the premium stays the same. Indexed universal life is where the policy is tied to an index such as the stock market and premiums fluctuate depending on the ebbs and flows of the market. And variable life insurance is where the owner of the policy can invest in various investments which in turn determine what the premium payment will be.
What rate class you qualify for will determine how much life insurance premium you will pay. A top rate class can save you 10% up to 500% on your premium compared to someone of similar age and gender.
Your five basic life insurance rate classes are: Preferred Plus, Preferred, Standard Plus, Standard, and Table Rated. Also, some companies offer a non tobacco rate class for clients who use tobacco products but do not smoke cigarettes.
For you tobacco smokers there are three basic smoker life insurance rate classes: preferred tobacco, standard tobacco, and table rated tobacco. Notice there is no rate class for preferred plus or standard plus.
Table rated rate classes are designated by letters such as B, C, D, E, F, G, H, and I or numbers such as 2, 3, 4, 5, 6, 7, 8, or 9. Each lower rate class will typically jump the cost of life insurance up another 50%. Obviously, the healthier you are the better rate class and the lower the cost of life insurance.
Now, so far we have talked about types of life insurance and rate classes that help determine how much life insurance for a male or female will be. But this next factor is not something you can control but it will make a huge difference on how much life insurance will cost for you.
The most important variable when determining “how much does life insurance cost” will be your age. The younger you are the less your life insurance premium will be. The reasoning is the younger you are the farther away from that inevitable day when you will die. Because the reality is everyone has a 100% chance of dying. But the million dollar life insurance question for you and an insurance underwriter is when?
How much does life insurance cost for a male compared to a female? The answer is more. The simple truth is males pay more for life insurance than females. The main reason is women tend to outlive men and women tend to take preventative measures when it comes to their health. It is what it is.
The face amount of the death benefit will also play a factor in determining how much life insurance is for you. The more coverage you purchase the more you pay for life insurance. However, consider that life insurance is cheaper per unit the more you purchase. Therefore, the cost of life insurance actually goes down the more you purchase. Typically life insurance bands where you will receive a price break are every $250,000. Therefore, buying $500,000 is a lot less per unit than buying $250,000 of life insurance.
For example, a 42 year old male in perfect health will pay $37 a month for a $500,000 20 year term. In contrast, a 42 year old male in perfect health will pay $22 a month for a $250,000 20 year term. The first $250,000 is $22 and the next $250,000 is only $15. That is a savings of about 30% on the second $250,000 of life insurance.
Many life insurance companies have carved out a niche market within the bigger life insurance marketplace. The key to finding the lowest cost life insurance is to know which company to choose for your specific health or lifestyle profile. That is where TermLife2Go comes in. We specialize in niches, such as those elaborated on in our top life insurance companies and our best no medical exam life insurance companies list.
Our job is to know what company offers the best prices for various health and lifestyle conditions such as:
diabetes, smoking, marijuana, non U.S. residents, dangerous hobbies, family history of cancer, overweight, alcoholism, previous felony, receiving SSDI, diseases, and prescription medications.
Determining how much life insurance costs depends upon choosing the right company. Finding the right company depends on finding the right agency, an agency such as TermLife2Go.
We are a group of seasoned life insurance agents with one focus. Our focus is on providing our clients with options. It is only by providing our clients with the ability to choose from all the best companies that we are able to save our clients thousands of dollars over the life of their policies. Our job is to find you the best company at the best price…for you!
Give us a call today and let us find you the best company out there based on your specific health and lifestyle profile. Give us a call today.
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