Cost Of Life Insurance Might Be Lower Than You Think
One of the most common reasons why people put off life insurance is because they think it's too expensive, according to the " Insurance Barometer Study.
However, when asked how much a $250,000 term life policy would cost a healthy 30-year-old, nearly half of millennials overestimated by five times the actual amount. The average cost for such coverage is lower than you might think.
That means they could be missing out on the protection they need for all the wrong reasons.
In this article, we'll dispel some of the myths about the cost of life insurance, give you insight into which policies are most affordable or lower in cost, and help you find simple ways to make room in your budget.
Misconception About the Cost of Life Insurance
You have a set amount of income from your paycheck — and a lot of priorities vying for a piece of it. There's the car payment, rent or mortgage payment, and, of course, those student loan payments that seem to stick around long after your last day on campus.
So, you tell yourself you can't afford life insurance, and push it off for another day.
But, when you think about what could happen if you passed away, the real question is: Can you really afford to go without life insurance?
If you passed away, a number of expenses might get passed along to the people you care about most. First, they would likely be covering the cost of your funeral out-of-pocket, which can run nearly $2,100, just for a basic viewing and burial.2 Second, if a relative or significant other co-signed on your house, car or student loans, those debts may become their burden to bear. With the average student debt per graduate reaching $16,900 for public and private four-year institutes,3 that's a hefty tab to pick up.
The money from a life insurance policy could help to offset these costs, allowing your loved ones to focus on overcoming their emotional grief, instead of adding financial grief to it.
Tips for Finding Cheap Life Insurance
You see the ads everywhere - "Cheap Life Insurance for Pocket Change Per Day." But are these life insurance rates real?
Simply put, the answer is yes AND no. Life insurance rates vary significantly, depending on how much coverage you want and your individual risk factors. But good quality, rock-bottom cheap life insurance policies do exist. That said, don't be fooled by a quick life insurance quote form. It doesn't guarantee affordable life insurance. It's just an estimate. Finding the cheapest ife insurance policy for your may require that you speak with a licensed agent. They may also require more detailed information, including a medical exam.
The quick or affordable life insurance quote forms can be useful, however. They're a good place to start shopping for low cost life insurance. A few things to keep in mind:
- Life insurance rates aren't locked in until the application process, including the medical exam, is complete. Only then can the life insurance company place you in the appropriate rate class. Your cheap life insurance will be worth the wait!
- If you don't get the affordable life insurance that the quick quote form estimated, consider the value to you and your loved ones. A few dollars more might not be a deal breaker. But you can always talk to your life insurance agent. It costs nothing to talk things through and see if there are other life insurance options available.
- If an advertisement promotes cheap life insurance without a medical exam, it may not actually be the cheapest.Life insurance medical exams are the only way for life insurance carriers to accurately assess your health and award you with the most affordable life insurance rates.
- When possible, work with a company that represents multiple life insurance carriers. These companies aren't biased and trying to shoe-horn you into their company's life insurance products. Some companies specialize in covering specific situations (for example, tobacco usage), so shopping multiple carriers may give you greater access to good rates.
To get "too good to be true" (yet real!) life insurance rates, talk to a licensed agent. This might prove your quickest route to affordable life insurance.
Options for Affordable Insurance
Out of all of the different types of life insurance, term life insurance is generally the most affordable and often can be a low cost life insurance. However, universal life insurance offers the greatest flexibility in terms of how much you pay per month (i.e. your "premium"). After you find a policy that fits your needs, make sure it will also fit into your budget.