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What's the cost of term life insurance?

Most people think they can't afford term life insurance. We'll help you learn how much term life insurance may cost you and the main factors that can impact what you'll pay for a policy.

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How much is term life insurance?

Term life is a type of life insurance policy that provides coverage only for a certain period of time such as 10, 20, and 30 years. If you die within the term of your policy, your beneficiaries will receive a cash death benefit. If you live longer than the selected term, the policy will expire with no pay out.

Because it's considered a temporary policy, term life insurance can be less expensive and more affordable than permanent life insurance (ex., whole life and universal life). However, studies show that most people tend to significantly overestimate the cost of term life insurance and therefore, never buy it.

For example, when asked to guess the cost of a term life policy for a healthy 30-year-old, most people surveyed expected the cost to be $1,000 a year. 1 The truth is the average cost of a term life insurance premium is around $160 a year.1

The cost of term life insurance can be very affordable. In fact, a healthy 30-year-old woman can get a $20,000 term life insurance policy for less than $8/month. Even older people will find term life insurance an affordable option. For example, it's possible for a 55-year-old woman to get a $20,000 policy for around $25.50/month.

The actual cost of an average term life insurance policy depends on a number of factors. This can include things like your

  • Health
  • Age
  • Coverage amount
  • Length of the term selected
  • Occupation, and more

However, by far the biggest factor impacting term life insurance premiums is age and gender.

For example, a $50,000 policy for a healthy 25-year-old woman will cost approximately $14 a month, while a premium for a 55-year-old woman for the same amount would be $60 a month. Using this same example but for a man, that same $50,000 policy would cost a 25-year-old male approximately $22.50 and a 55-year-old male $86.50.

Not sure just how much a term life insurance policy may cost you? The best way to determine your rates is to get a life insurance quote.

How much term life insurance you need will also impact what you pay for a policy.

The length of the policy term you select will also determine the cost of a policy. For example, a 10-year term policy will be less expensive than a 25-year policy due to the amount of years you'll have coverage.

Of course, the amount of insurance you buy will also impact just how much you pay for a policy. For example, a policy with a $10,000 Death Benefit will be less than a policy with a $100,000 Death Benefit.

So, how do you know how much term life insurance you may need? It depends on your financial and family situation. For example

  • Are you the primary wage-earner in your home with others who depend on your income for support?
  • Are you a two-income household that depends on the money you both earn to pay the mortgage, support your growing family, and pay the bills?
  • Are you financially responsible for the care provided to your elderly parents?
  • Are you a single person with debt that you don't want to leave behind for others to pay if you unexpectedly pass away?
  • Are you concerned about leaving the financial responsibility of covering your final expenses after you pass away for others to cover the costs?

There are several ways to calculate your term life insurance needs. And while no single formula may be right for you, it gives you a place to start.

The simplest and most basic method most insurance and financial professionals recommend is to buy at least 10 times your annual income in life insurance. For example, if you earn a salary of $50,000 and multiply it by 10, you should consider buying at least $500,000 in life insurance. If you have children, it is recommended that you add an additional $100,000 in coverage per child above your income calculation figure.

Whether in person with an agent or online, when getting a life insurance quote, try plugging in various amounts to get a better idea of just how much term life insurance you can comfortably afford.

Other factors that can impact term life insurance rates

  • Your health. If you have health issues you may still be able to get life insurance. However, the healthier you are the more affordable a policy will be.
  • If you use tobacco. If you're a smoker or use tobacco products of any kind, plan on paying more for a term life insurance policy.
  • Your lifestyle and hobbies. Do you engage in risky hobbies or live a lifestyle that involves racing, skydiving, or mountain climbing? Due to the risk, you'll pay more for coverage.
  • Your occupation. Occupations considered somewhat hazardous like piloting a plane, firefighting, commercial fishing, or logging will result in higher premiums.

Cost saving tips for buying term life insurance

  • Better manage your overall health by losing weight and improving your blood pressure
  • Discontinue the use of all tobacco products
  • Engage less in high-risk hobbies or activities
  • Get more than one term life insurance quote and compare rates

At Liberty Mutual, we can help you get the life insurance you need at a great price! Start your life insurance quote today to see how affordable it can be.

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Please note: Information presented on this page is intended to be general information about insurance and is not specific to Liberty Mutual policies. Policies and coverages vary by state and insurer. Contact your insurance company to understand specifics regarding your policy and coverages.