Many people often shy off from insurance because they think it is too expensive to afford. However, term life insurance is surprisingly cheaper than many people imagine. This is true especially for young individuals in their best health conditions. In this article, you will learn how much term life insurance costs on average and how you can purchase a policy that will fully cover your loved ones. As a free advice, young guys in their 20s and 30s should consider term life insurance because it is way cheaper compared to other services they routinely pay for. In this age bracket, insurance premiums are at their lowest
Why life insurance is necessary even to those that don’t need it
Many people are made to believe that life insurance is only meant for people with dependents. In fact, everybody needs insurance that will cater for their final expenses including burial when you are not there.
Besides that, you need life insurance to cater for uncovered medical expenses and other open debts. This means that your parents or siblings will not have to worry about such expenses when you are gone even if you do not have direct dependents, usually spouse or children. (Even if parents or siblings may not be liable for the debts unless they cosigned the loans with you, some companies will tend to harass the remaining relatives into paying)
Remember that if you die any moment before getting covered, it will be too late to provide for the loved ones. Considering the fact that life insurance has no do-over in the case you are not covered, you need to think twice about term life insurance to safeguard your future.
Many life insurance experts are known to quote, “Life insurance is the final financial statement left to your loved ones following your death” and it is true. So prepare the statement in advance to get everything in order even if you die abruptly.
Finding out how much life insurance you need
Determining the amount of life insurance you need is quite simple; just consider the number of dependents you have. The more the dependents, the more the life insurance you need and vice versa. Mostly it is argues that the best amount of life insurance is 10 times what one earns. In that case, if you are earning 60,000 dollars per year, you are needed with a 600,000 dollars’ worth of policy.
This is basically regarded as the starting point as you adjust the policy along the way. This may include additional mortgage which will demand that you add more coverage to pay off the loan. In case of zero debts or enough family income, you may decide to adjust the policy payments downwards. Actually when one has no dependents, a term life insurance policy worth $100,000 is more than enough.
Better low insurance policy than none at all
There are different life insurance policies as described by each carrier but if you think a certain amount such as $500,000 is too high, you may decide to take a cheaper policy that you can effectively and conveniently service without a problem. Even though smaller amounts may not sufficiently provide for the left dependents until they become adults, the policy can at least cover final expenses including burial and readjustments of the dependents to life after you are gone.
Term life insurance offers the best value
A majority of the people that shy off from life insurance is because they get quotes for whole life insurance policies. Whole life insurance is basically 10 times more expensive as compared to term life insurance. In the case of whole life, the invested amount can be withdrawn at some point in life but the investment provisions are tough for many middle and low income earners. The charges are high and thus may not be ideal for most of the seniors.
Term life on the other hand is quite affordable because it involves a specific set time frame. The policy is usually in effect upon completion of payment of premiums in the set period of time.
In order t determines the exact cost of term life insurance policy, a number of factors are considered including;
- Age- the older you are, the higher it costs and vice versa
- Risk factors- smoking individuals, heavy drinkers, obese victims and diabetic people among many others suffering from such risk factors are needed to pay higher premiums as compared to those that are not using or suffering from such risk factors.
- Involvement in dangerous activities- cliff divers and race car drivers are involved with risky activities thus attract higher premiums than those not involved in the same.
In short younger, healthy individuals not involved in dangerous activities and other risk factors will find term life insurance to be quite cheap and affordable. A good example is whereby a 25 years old male and non-smoker will be allowed to get up to 100,000 dollars by paying between 83-186 dollars per year in a period of 10 years. On the other hand a 35 years old male and nonsmoker will be required to pay more premiums to get the same amount within the same period.
Price personal policy
It is important that you seek an insurance company that offers customized life insurance quotes so that you can choose the right quote that fits your needs and income.