According to the AIG Life Insurance IQ study, 51% of Americans either don’t know whether they have life insurance or none at all. Although 70% of respondents recognized that life insurance could protect their family’s chances of having a financially secure life, many are still uninsured.
What many fail to realize is that life insurance premiums are cheapest when you are young and healthy. And you will never be younger or healthier than you are today, which means your premiums are lower than ever. In recent years, premiums have also become more affordable for older consumers and people with health problems.
Find out more about the options available, whether you are buying your first policy or getting a second policy to complement an inadequate employer-sponsored policy.
How to get quotes for life insurance
You can safely go from website to website and get quotes from every single insurance company. But it is also possible – and faster – to receive offers from several providers in one place. This allows you to make side-by-side comparisons to choose the best coverage at the cheapest price.
Sites like Ladder and Bestow make the process easy for you to find a policy that works for your budget. With the following tool from our life insurance partners you can find offers that are tailored to you. Just click on your state of residence and the tool will be a safe way to buy life insurance and will save you a lot of time in the process.
Compare the average prices
In addition to getting quotes from multiple sources, it’s also important to compare tariffs between different policy types. At the moment we are concentrating on term life insurance.
Term life insurance is cheaper than life as a whole – typically 10% or less for a comparable death benefit. It also has easily adjustable coverage based on your life events.
For comparison, we use Quotacy, an insurance market, to examine the premiums for term policies in three insurance steps:
- $ 250,000
- $ 500,000
- $ 1 million
We’ll also compare these increments over different maturities (10 years, 20 years, and 30 years) based on ages of 25, 35, 45, 55, and 65 years.
Term Life Insurance Quotes for Men
|Age when purchasing the policy||Death benefit||10 year monthly premium||Monthly premium with a 20-year term||30 year monthly premium|
|25th||$ 250,000||$ 9.75||$ 12.26||$ 17.72|
|25th||$ 500,000||$ 13.64||$ 19.11||$ 28.68|
|25th||$ 1 million||$ 20.04||$ 30.59||$ 48.25|
|35||$ 250,000||$ 9.77||$ 13.45||$ 21.09|
|35||$ 500,000||$ 14.06||$ 21.24||$ 35.24|
|35||$ 1 million||$ 21.92||$ 33.99||$ 64.51|
|45||$ 250,000||$ 16.81||$ 26.42||$ 42.88|
|45||$ 500,000||$ 27.62||$ 46.44||$ 79.38|
|45||$ 1 million||$ 46.81||$ 87.87||$ 151.21|
|55||$ 250,000||$ 37.48||$ 61.26||$ 120.71|
|55||$ 500,000||$ 67.57||$ 114.74||$ 232.23|
|55||$ 1 million||$ 123.24||$ 221.61||$ 457.05|
|65||$ 250,000||$ 101.76||$ 199.16||Custom listing only *|
|65||$ 500,000||$ 191.29||$ 385.08||Custom listing only *|
|65||$ 1 million||$ 362.69||$ 743.72||Custom listing only *|
* Available according to custom offer only, as a 30-year policy is valid until the age of 95 and virtually guarantees a payout of the death benefit. The insurer must make a full subscription in order to submit a quote.
Term Life Insurance Quotes for Women
|Age when purchasing the policy||Death benefit||10 year monthly premium||Monthly premium with a 20-year term||30 year monthly premium|
|25th||$ 250,000||$ 8.61||$ 10.79||$ 14.68|
|25th||$ 500,000||$ 11.22||$ 15.72||$ 22.73|
|25th||$ 1 million||$ 15.81||$ 23.05||$ 37.82|
|35||$ 250,000||$ 8.92||$ 11.94||$ 18.28|
|35||$ 500,000||$ 11.96||$ 17.87||$ 29.69|
|35||$ 1 million||$ 18.92||$ 29.91||$ 52.15|
|45||$ 250,000||$ 15.15||$ 21.33||$ 33.51|
|45||$ 500,000||$ 24.22||$ 37.41||$ 61.32|
|45||$ 1 million||$ 38.24||$ 67.91||$ 116.36|
|55||$ 250,000||$ 28.21||$ 45.38||$ 91.54|
|55||$ 500,000||$ 50.05||$ 84.39||$ 176.50|
|55||$ 1 million||$ 90.94||$ 158.86||$ 330.74|
|65||$ 250,000||$ 64.97||$ 134.30||Custom listing only *|
|65||$ 500,000||$ 122.14||$ 257.70||Custom listing only *|
|65||$ 1 million||$ 223.86||$ 485.77||Custom listing only *|
What Term Life Insurance Quotes Reveal
The quotation marks in the tables above indicate notable factors that affect an offer for term life insurance. Here are some takeaways:
- The premiums are higher for men than for women.
- The male-female variance increases with age.
- The premiums are significantly higher for longer terms.
- The premiums are significantly higher for later purchases.
Note that 30 year insurance policies for 65 year olds require a customized quote regardless of death benefit. Again, this is because it is very likely that the insurance company will have to pay the death benefit at some point in the term.
It is precisely for this reason that it is so often recommended that you get life insurance as early as possible.
Other factors that affect life insurance premiums
While age and gender are two of the most fundamental factors in determining life insurance premiums, there are many, many more.
This is a complicated factor because the options are so extensive. You can have relatively minor health problems, such as: B. Well-controlled hypertension that only increases your monthly premium by a small amount.
More serious health conditions like diabetes, heart disease, or kidney disease can cause premiums to rise. The same applies to one-off events like the fight against cancer.
If you have had or have had any of these conditions in the past, your application will likely be individually screened for risk factors based on your personal situation. You may also be asked to undergo a medical examination.
If you’ve had certain health problems, this is another factor. For example, a cancer episode 10 years ago has less of an impact on your premium than a current diagnosis. Other health-related factors include your weight-to-height ratio as measured by your body mass index (BMI) and any medications you are taking.
Family health history
Even if this is a factor that you cannot control, it can affect your premium. Most insurance claims ask if anyone in your immediate family has or has had serious health problems.
The immediate family is generally limited to your parents and siblings. This includes severe health conditions such as cancer, heart disease, diabetes, or kidney failure. Most life insurance companies deal primarily with family members who have had serious health problems before they turned 70, especially family members who have resulted in an early death.
Smoking and tobacco use
Smoking and tobacco use are the biggest premium determinants that you can control. And from a life insurance premium perspective, perhaps the greatest benefit of being a non-smoker is that you can give yourself.
The best way to illustrate the effects of smoking is to compare the premium rates for smokers and nonsmokers between men and women. The table below shows offers for 20 year life insurance of $ 500,000.
|Age when purchasing the policy||Male non-smoker||Male smoker||Female non-smoker||smoker|
|25th||$ 19.11||$ 53.33||$ 15.72||$ 34.58|
|35||$ 21.24||$ 84.14||$ 17.87||$ 68.33|
|45||$ 46.44||$ 205.27||$ 37.41||$ 150.44|
|55||$ 114.74||$ 471.74||$ 84.39||$ 333.19|
|65||$ 385.08||$ 1131.34||$ 257.70||$ 844.89|
Note that the premiums for smokers are many times higher than for non-smokers.
For example, the premium for a male smoker at the age of 25 is almost three times that for a non-smoker. The multiples are roughly the same for female smokers. At 35, this increases to four times the premium level, where it continues with the same multiple at older age.
A 35-year-old man would pay an additional $ 63 a month for the same amount of life insurance – essentially more than $ 750 a year for the “privilege” of being a smoker.
The dramatically higher premiums for smokers illustrate the impact of smoking on longevity and the need for insurance companies to account for the higher risk posed by higher premiums.
According to the Centers for Disease Control, smoking causes over 480,000 deaths each year. Below are examples of how smoking increases your risk of developing certain serious health problems.
- Coronary heart desease: 2X to 4X
- Stroke: 2X to 4X
- Lung cancer: 25X for men and 25.7X for women
- Chronic obstructive pulmonary disease: 12X to 13X
You should also know that life insurance companies look at casual smoking, cigar smoking, tobacco chewing, and e-cigarette use (vaping) in the same light.
Two other pastimes that have a similar impact on life insurance premiums are: excessive alcohol consumption and illegal drug use. Both of these increase the likelihood of early death.
It is not as easy to hide these habits as you might think. For example, excessive alcohol consumption may be revealed through one or more DUIs / DWIs or even alcohol-related incarceration.
Illicit drug use can be determined by a criminal investigation or even blood tests over the years to determine the presence of the substances in your bloodstream.
Granted, this one completely surprises most people. This is mainly because the vast majority of professions are not a risk factor. A small group of occupations was found to be at high risk.
According to the Bureau of Labor Statistics, the 10 most dangerous occupations (in order of most fatal accident rates) are:
- Fishermen and related fishermen
- Airplane pilots and flight engineers
- Garbage and recyclable material collectors
- Driver / salesman and truck driver
- Farmers, ranchers and other agricultural managers
- Structural iron and steel workers
- First Supervisor of Construction and Extraction Workers
- First supervisor for landscape, lawn service and property maintenance workers
These are just the 10 most dangerous. But there are also other professions such as police officers and firefighters, which are also considered to be higher-risk professions.
If you fit into one of these occupational classifications, you will pay an adjusted premium based on your occupation’s high risk of death.
Risk Factors That Affect Your Life Insurance Premium
High risk hobbies. What you do in your spare time affects your life insurance premiums. Certain activities such as skydiving, racing of any kind, deep sea diving, backcountry skiing, climbing and many others are considered risky.
Your driving record. If you have multiple violations of the rules of movement or one or more culpable accidents, you will pay a higher premium, especially if you have a DUI / DWI on your file.
Your credit rating. Life insurance companies have found a link between bad credit and higher death rates. This could be due to financial pressures affecting creditworthiness, but also your health and behavior.
Your criminal record. If you have any beliefs in your past, especially in recent years, it may have an impact on your premium. The age and type of incident are significant. For example, a criminal conviction 25 years ago might have no effect at all. But one from five years ago could.
Some consumers may be interested in life insurance. In this case, all of the above-mentioned risk factors that determine the premiums for term life insurance apply to the entire life insurance policy.
The main differences between life insurance and term life are:
- All of life is permanent. Once you have signed up for a policy, it can only be canceled if a premium is not paid.
- All of life involves an accumulation of present values. Part of your premium goes towards the present value of your policy. Interest is also paid on the present value, which further increases the balance. You can borrow against this cash value.
- The premium never changes. Whether you pay annually, quarterly, or monthly, your total life insurance premium will remain the same for the rest of your life. This is different from term life insurance, where the premium adjusts if you renew the policy after the original one has expired.
- All life insurance costs a lot more. Life insurance is usually 10 to 15 times higher than risk insurance for an equivalent death benefit. The main difference between the two premiums is the portion of the lifetime premiums that equals your present value.
Below are examples of Quotacy’s entire life quotes on similar insurance amounts at different ages for men and women.
* Courtesy of Quotacy
Although insurance agents often promote the idea of the present value characteristic of all life insurance, it is largely exaggerated. Returns on the total present value of life are less than what you can get with traditional investments like index-based ETFs. Much of the total life premium goes into commissions and fees – especially in the early years of the policy.
How to buy life insurance
When applying for life insurance, provide as much details as possible about your personal profile, including your health, job, hobbies, smoking status and family health history. The more accurate the information you provide, the more reliable the premium offer you will get.
If you have any health issues or activities that could affect your premium, submit a claim to the best life insurance companies who can take certain risk factors into account. Some insurance companies are known to specialize in specific situations. For example, some insurers offer tailor-made life insurance for people over 50.
It is highly recommended that you look at term life insurance first. Term life insurance is a cheaper option, and you can change your coverage at any time. For example, it helps if you have a young family. In this scenario, you will need more life insurance, but you will likely have a small budget to work with. Term Term allows you to buy more insurance that you can adjust up or down as things change in your life.
Whether you are applying for a tenure or a lifetime, the process begins with soliciting an offer. From there, you will likely need to fill out a more detailed application with the insurance company providing your policy. You may need to have a medical exam.
Once you have selected a life insurance policy, the insurance company will request the first premium rate in advance. If you make a payment, your policy will take effect at the time of application, subject of course to the insurer’s approval.
Frequently asked questions about life insurance
Most financial advisors recommend that you have at least ten times your annual life insurance salary. For example, if your salary is $ 50,000, a minimum of $ 500,000 is recommended.
Employer sponsored life insurance policies perform well, but in most cases they are insufficient. Usually it only covers one or two times your annual salary. Another disadvantage of employer-sponsored life insurance is that it is tied to your employment. If you leave your job or are terminated, you will lose your life insurance.
It may not matter whether you have no loved ones such as a spouse, children, or other people who may be dependent on your income. However, if you do, the lack of life insurance puts financial survival at risk in the event of your death. Life insurance can help provide for your loved ones after your death – or at least cover your final costs.
You may need to consider life insurance with guaranteed acceptance. This is the type of insurance that an insurance company offers if you don’t qualify for traditional life insurance.
The death benefit is capped at no more than $ 50,000, and often much less. The premium is also high compared to the death benefit. At least some of the life insurance coverage can help if you are in poor health and provide sufficient funds to cover your final costs.
Find the right life insurance
Life insurance is an incredibly flexible financial service. You can choose how much coverage you need or want, how long you want to keep it (in the case of a term) and even have a lot of control over the premium you will pay.
We strongly recommend – like most financial advisors – that you take out term life insurance. Not only is it cheaper, but it also frees up your cash flow for other purposes, such as: B. to invest it yourself or to secure a new home.
The rewards vary based on gender, age, personal profile and even geographic location. So look around for the greatest possible coverage at the lowest cost.