- How much you should pay for a life insurance policy depends on many factors that are specific to your unique situation – everyone’s life is different, and a good monthly payment for one person may not be the same for another.
- Age, gender, health, number of dependents, occupation and income, and type of policy are some of the factors that influence how much you’ll pay for a life insurance plan.
- When it comes to basic family protection, a decent rule of thumb is to expect to pay about 1% of your income on term life insurance. So if you make a $50,000 salary, paying $500/year (plus or minus) would be reasonable.
- Calculating what a good monthly payment would be for you involves comparing different policies. Our Needs Assessment Tool is a great place to start, and gives you a personalized recommendation for coverage!
Why “What is a good monthly payment for life insurance?” is an impossible question to answer without more information
Most people want to be smart with their money. Because insurance isn’t a want, but a need, the majority of people shopping for a life insurance policy will try to make sure that they’re getting the best deal, just as they would if they were shopping for a car insurance policy. But just like a car insurance policy, where how much you pay depends on how many cars you have, where you live, how old you are, and some other factors, what a “good monthly payment” for life insurance is depends on your specific life circumstances. There is no average “good monthly payment” across the board. You can look at averages in terms of age, gender, health, number of dependents, income level, occupation type, and policy type, but there will still be variation when it comes to finding an affordable rate for life insurance that still offers quality coverage for your family.
Here are some general truths that may give you a better idea of how much you may pay in monthly premiums depending on your answers to these questions:
How many people rely on you for your income or support?
Life insurance is designed to replace you in terms of providing for your family if you pass away unexpectedly. No amount of money can replace your value and worth to your loved ones, but it can mean the difference in terms of their financial security. If you pass away without enough coverage – i.e., less than enough to replace your lost income and insurance benefits, and to cover your debts and funeral costs – then you may leave your spouse, children, or parents without the money they need to have the lives they’ve dreamed of. The more people who rely on you, the more coverage you need to have, and the higher your monthly payment may likely be.
How much do you make annually?
As we just discussed, life insurance is designed partly to replace your income if you pass away prematurely. The more you make, the more coverage you’ll need, and the more you can expect to pay in monthly premiums.
How risky is your job/are your hobbies?
The riskier it is to insure you, the more a life insurance company will typically charge you for coverage. (This works the same way car insurance does – younger drivers in populated areas with accidents in their history will pay more, because they are likely to need that insurance coverage). If you like to go skydiving frequently, for example, or work in a dangerous job like roofing, you’re more likely than other people who have a desk job and don’t go skydiving to be involved in a fatal accident or pass away earlier in life. Your risk is higher, so you can expect your monthly premiums to be higher as well. A “good monthly payment” for a life insurance policy for you will not be the same for your friends who are the same age with the same number of dependents who have a safer lifestyle.
How’s your health?
People in poor health, with chronic conditions, or with a family history of medical illness are riskier to insure, and will therefore pay more per month for a life insurance policy. Your health is actually one of the most influential factors on this list when it comes to how much life insurance will cost you! The underwriting process (evaluating your health and other risk factors) will usually involve a medical exam. However, if you are in poor health or don’t want to disclose your health information, there are non-medical plans that you can qualify for, though you may end up paying a higher premium for skipping the underwriting process.
How old are you?
Age can influence how much you’ll pay for your plan. The younger you are, the more coverage you’ll need (because you have a longer life ahead of you), but the less expensive you are to insure (because you are statistically more healthy and less likely to pass away than someone older than you). Buying a life insurance policy earlier in life means that you can expect a “good monthly payment” to be cheaper than if you wait to purchase a plan in your middle-age or elderly years! For example, a 23-year-old will probably pay less for coverage than a 43-year-old would.
Are you male or female?
Gender does affect what a “good monthly payment” for a life insurance policy will be; in most states, men will pay higher premiums than women will for the same amount of coverage.
What type of policy are you buying?
There are many different options for life insurance policies available to you, but they are divided into two major categories: term life plans and whole life (or permanent life) plans. Permanent life policies offer protection for your entire life; no matter when you die, your plan’s benefits are paid out to your beneficiaries. Term life policies only protect you for a set amount of time, typically between 10 to 30 years. Because term life plans are simpler and shorter, they cost less than permanent life plans.
How Everyday Life prevents you from overpaying for unnecessary coverage by making sure your coverage continues to make sense over time
There’s one other major factor that influences what a “good monthly payment” is for your situation – the insurance company you choose. Everyday Life is the best choice for the savvy consumer who wants to save the most on their term life policy. Our smart term life plans use Predictive Protection™ technology to discover exactly how much coverage you need right now and then automatically adjust that coverage over time based on major life events. For example, if you have young kids, you’ll need a lot of coverage during this stage in your life, and you’ll have to pay a higher premium – when your kids are closer to moving out, though, you won’t need as much coverage, so you shouldn’t pay the same amount! We decrease your premiums to reflect your real life needs. This stops you from ever paying for more coverage than you absolutely need, and can save you thousands over the life of the plan.
Use our Needs Assessment Tool to calculate what you would pay for a dynamic term life plan!
In order to determine what a good monthly payment for life insurance would be for your specific needs, you can compare different policies online in minutes! Using our Needs Assessment tool, you can find out what our personalized recommendation for coverage would be and get matched to a policy you’re likely to be approved for. Simply enter a few details (no contact information required) and find out what your dynamic policy could save you!
Your personalized quote would look something like this:
Take our Needs Assessment now at https://insurance.everydaylifeinsurance.com/quote/!