For those on a budget, getting life insurance can be a difficult decision. On one hand, it offers a vital safety net for your family, but on the other, it’s another item on your long list of expenses. Thankfully, term life insurance can be the perfect solution.
Not as expensive as permanent life insurance policies, term life insurance is ideal for bridging a gap until you can afford a permanent policy, or if you want to cover a specific financial commitment. Here we’ll answer the question of how much does term life insurance cost.
What Is Term Life Insurance?
There are many different life insurance terms, so we thought it was important to define what term insurance is. This is a form of life insurance that covers you for a specific term, such as 10 years. Once that term ends, your policy expires.
This is in contrast to permanent life insurance. These policies last until you pass away and will continue for as long as the payments are made. It’s important to know which of these two main types you want before proceeding.
Related Article: https://bucklerins.com/how-does-life-insurance-work-in-ontario/
How Much Does Term Life Insurance Cost?
As you may expect, there isn’t one definitive answer here. The cost can depend hugely based on various factors but there are some average figures we can look at. The range is from around $15 per month to over $1,000. As you can see, this is not entirely helpful, but we’ll break it down.
30 Years Old – For a young perfectly healthy person with a 20-year term and $250,000 in coverage, you’ll be on the bottom end of this scale at $15. However, if you had health issues and were a smoker, this can increase to $90 or more.
40 Years Old – The bottom end of the scale here is about $25 with the top end as a smoker being around $120. If you were to double the coverage amount to $500,000 then the price approximately doubles with it.
50 Years Old – The minimum monthly cost here is $50, with the maximum for a smoker usually being in the region of $200. If this is still too expensive for you, then you can reduce the term, as this will lower the premium.
60 Years Old – This is where the coverage starts to become expensive as the risk of death during the policy increases. The minimum is around $90, with the maximum being $350 or more.
70 Years Plus – Life insurance at this point becomes incredibly expensive and it’s usually a better option to get permanent life insurance. A healthy 70-year-old may get a term policy for $150 per month, but an unhealthy 80-year-old may be paying way over $1,000.
What Factors Affect the Cost?
As we’ve already seen, there are several factors that go into your insurance quote but let’s have a quick overview of the most important.
Age – The older you are, the more you’ll pay for term insurance. This is simply due to the sad fact that the older we are, the more likely we are to die.
Smoking Status – Smoking can nearly double the premium you will pay. Want to give up? Insurance companies often only ask you to be cigarette-free for 12 months.
Term – The longer the term of insurance, the more you will pay. Simply put, a 20-year policy will be more expensive than a 10-year term.
Coverage – This is the payout your beneficiaries will receive if you die during the term of the policy. The higher it is, the more you will pay.
Health Status – Your medical history will be checked and the likes of chronic conditions or genetic conditions can increase premiums. It’s possible you’ll also need a physical assessment.
Why Choose Term Life Insurance
There are many reasons why term life insurance may be right for you.
Cost – It’s much more affordable than a permanent policy. This is great for those who won’t have a large budget right now but still want peace of mind.
Specific Needs – Have a 20-years left on your mortgage but few other financial commitments? This is a good example of how you can use term insurance to cover a specific expense. By the time the policy expires, so will your large financial commitment, such as a mortgage.
Simplicity – Permanent life insurance policies have a cash value element that can be linked with investments. Term insurance is straightforward. You pay into the policy and it’ll pay out if you die during the term, it’s as simple as that.
A Strong Bridge – Many use term insurance as a bridge until a permanent life insurance policy fits their circumstances and budget. Many insurers even offer you the chance to convert your term policy into a permanent policy.
Final Thoughts
How much does term life insurance cost? As we’ve seen, the answer can depend on a few key factors but it’s usually quite affordable. It can give you that financial safety net without burning as big a hole in your pocket.
The only surefire way of finding out is by getting a quote. Here at Buckler Insurance, we’ll be able to do just that by searching through our wide range of providers. Contact us today and we’ll be happy to find a policy that fits in with both your circumstances and budget.
