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Do you know how much your insurance will cost you?
What about how much insurance you actually need?
If you don’t know the answers to these questions, then use our calculator below to get the answers in seconds…
How to Use The Life Insurance Cost Calculator
- Step 1: Enter your age – Rates increase 8-10% each year you put off buying.
- Step 2: Enter your gender – Women generally tend to pay less than men for equivalent life insurance policies.
- Step 3: Enter your zip code – Where you live has a slight impact on your rates.
- Step 4: Choose your term length –The term is how long your policy lasts. A good rule of thumb is choosing a term that matches your longest financial obligation.
- Step 5: Choose your coverage amount – Most people need 10-15x their income to cover the financial needs of their family.
Although it is difficult to know precisely how much your life insurance should cost, it is possible for you to estimate based on your circumstances.
You must do this so that you can be sure that you are paying an appropriate sum, and that what you are paying for covers all the variables that you require.
This includes the number of children you have and their education.
To work out roughly what you need, you should try and work out your ongoing financial obligations, then take off the sum of your assets, what you have to pay, by what you have in real terms.
The figure that is left over is the amount that the life insurance policy needs to cover you for.
This will only be a very rough estimate as there is no way to really know the inflation rates of bills, or other variables such as a crash in the property market, or recession.
How much life insurance do I need?
There are several different ways to work out how much life insurance you will need:
- One way to work it out is to say you need ten times your salary. This, however, does not take into account any variables.
- Another method is to use the ten-time salary rule but to add $100,000 per child to account for college expenses etc. However, again this is a little vague and does not cater to any personal circumstances.
- A more in-depth method is to work out all your debts, except your mortgage, even work out a funeral charge. Work out how long your family needs your financial backing and then times your salary by this. Then work out how much you have left on your mortgage. Then your children’s education costs. This will be the more accurate figure you can come up with.
How much does life insurance cost?
The average life insurance cost for a $250,000 life insurance cover is around $68.
However, there are many variables.
Age is a huge one, obviously, the older you are when you start, the higher the payment amounts and 18-year-old will pay around $16, while a 70-year-old will pay $445.
Clearly, another factor will be the value of your cover, which is determined by many things, including your occupation.
A woman tends to live longer, so this may mean a woman pays less.
Also, your health will play a factor.
If you are 18 with a terminal illness, you may end up paying more than a 60-year-old in perfect health.
How to pick the right life insurance policy
You may want to get many life insurance quotes for your needs to see what can be offered.
However, you will need to choose a term, length of the contract, i.e. 10, 20, 30 years.
There are also whole life policies which are usually more expensive, but do not terminate after x amount of years as long as you keep paying.
There are various add ons too, but term contracts and whole life policies are the principle concerns.
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