The cost of life cost of life insurance can vary greatly based on factors like type, amount and duration. It can also depend on the health of the applicant and their family history. For example, a person with a family history of cancer or chronic illness will typically pay more for life insurance. Other influencing factors include the occupation, hobbies and risky activities that the individual engages in. In addition, some riders (optional policy add-ons) can increase the premium.
Overall, however, life insurance is typically more affordable than people think. The most common type of life insurance, a 20-year term policy, costs an average of $26 per month for a healthy, non-smoking 35-year old.
Navigating Life Insurance Costs: Understanding Factors that Influence Your Premium
Insurance companies calculate life insurance rates based on mortality tables, which predict the average rate of death for each age group. The older you are, the more expensive your policy will be. But, the good news is that as you age, your life expectancy increases, which decreases the likelihood of your needing to make a claim and reduces the premium.
There are a few things you can do to lower your life insurance premium, such as quitting smoking, maintaining a healthy weight and cutting down on alcohol consumption. Your agent can also help you determine how much coverage you need based on your current and future financial obligations and goals. They can also take inflation into account, since a $250,000 death benefit today may not go as far in 10 or 30 years.