How much does life insurance cost?

Welcome to how much does life insurance cost


Life insurance is an affordable way to help protect your family's long-term financial security.

Level term Assurance is the easiest and cheapest tool out there if you want to protect your families income in a worst case scenario - i.e. death. Its quite frightening when you realise that 1 in 20 children lose a parent before they are 18 or have finished full time education The following information should help you when you are looking in the market place for the best value level term assurance and hopefully a guide  to understanding the product you are looking for.

Find competitive term insurance quotes online.

What Is level term Assurance? 

its  term assurance - this means you only get paid if you die within a fixed term . e.g. 15 years. Its called level as the amount you are paid does not change, it is always a fixed amount .So in a nutshell level term assurance guarantees a lump sum pay-out on the event of death within a fixed time period.

 e.g. $150,000 if you die with the next 18 years  .

BUT  it isn't 

Mortgage term Assurance  this is a product purchased to pay off your mortgage in the case of your death. it is also sometimes called decreasing  term assurance. this is because the amount it pays out goes down as your mortgage goes down. But this policy only pays off your mortgage there would be no surplus to help with the household bills.

nor is it 

Whole of Life Insurance  this investment is mainly used for inheritance tax planning.

SO 

Is life insurance worth having?

Well that very much depends on your circumstances  - if you are single no kids or  dependants at all then you would be better off looking at your own personal finances. But if you do have children or dependants the question needs to be asked what would happen financially in the case of my death. If  they could carry on as before then maybe you don't need a policy,  You need to think whether or not the spouse left behind will be able to carry on / start working especially if you have young children that need caring for, would   they would struggle to pay the bills, buy food etc. if the answer to this is yes -  then this is a relatively cheap way to solve this problem.

Why is it called assurance and not insurance?

this is because assurance is for something that is absolutely certain to happen, insurance is for something that is at risk only of happening  and the bottom line is death is assured.

So how much should level term assurance cost?

This depends on a number of factors :-

  1. The higher the lump sum paid out the more it will cost you on am monthly basis  - make sure you look for a policy that provides an amount  of money that will pay off outstanding debts  - this will  give peace of mind to your spouse and family. Also check if you have a death in service  benefit at your place of work - these can be very generous so are worth checking as they will reduce the amount you need to insure yourself for.
  2. the shorter the term the cheaper it is  - so think about how long any children have to go before they finish education, or how long before  your spouse reaches pensionable age.
  3. the less risk you have of dying the cheaper  the policy is  - facts such as smoking, general health, high risk jobs all play a part here. e.g. if you are a bottle of vodka, 40 cigarettes a day stunt man then expect to pay a very high monthly premium.
  4. Couples can buy joint or individual policies - even if a joint policy looks suitable check the cost of two separate ones as this may still be cheaper.

Am I to worry that cheaper policies do not mean better policies?

This is usually the case when buying something but here with level term assurance there is no investment element to the policy everything is fixed  - the policy pays out at the time of death. So here it must be said shop around for the cheapest policy that ticks all your needs.

Life assurance prices do change every day  - so there is no single best buyer insurer yet there are best buyer brokers. This is surprising as its a brokers job to trawl through all the policies and find you the best one to match all your needs. For this they normally take a commission which can vary enormously from broker to broker. Some however will only charge a fee, which of course could be cheaper but   its worth checking  all the options as fee only may not come with the best advise.

Buying level term assurance provides peace of mind for you and for those left behind in the event of death. This is always going to be a policy that you don't want to pay out . So you have to balance the cost of the security and peace of mind this policy will give you against the fact that ( hopefully it never pays out )

What about if I am sick  - does all the above apply ?

There are policies in the market place called critical illness policies. These are supposed to pay out if you get sick and cannot work. But sadly this is not always the case. Some pay out a fixed sum if you are suffering from a specific illness named in the terms of the policy. Put simply , if you buy a critical illness policy don't think great i am all covered if i get cancer, chances are the policy only covers certain types of cancer. Selecting a good critical illness policy takes time, a doctor and a geek, so it may be more beneficial to buy level term assurance and a policy that protects your income - income protection policy - this would protect your income at a pre agreed level if you are unable to work - either due to illness or loss of job.

Disclaimer
All Information on this site 'howmuch-does-lifeinsurance.com' is for information purposes only and not intended to constitute professional advice as circumstances will vary from person to person. Information will not always be up to date and therefore cannot necessarily be relied upon. We strongly advise professional advice is sought before taking out any policies.