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What Is Life Insurance?

Life Insurance is a contract between you (the policyholder) and an insurer (the insurance company), or paying your monthly insurance premiums, as a policyholder, the insurance company will pay out a lump sum of money to the named beneficiaries upon the passing of the policyholder.

How Much Does Life Insurance Cost?

The average cost of life insurance is $22.59 a month for a 40-year-old female buying a 20-year term policy for $250,000 in coverage. For a male, the average life insurance cost is around $27.35 a month for the same coverage. While a 20-year term policy is the most common term length purchased, rates will vary on an individual basis. 

Average Cost Of Life Insurance By State 

The national average life insurance premium by state is around $631 per year or about $53 per month, you should definitely to do your due diligence before you decide on how much life insurance you need or which company to choose.

You can check out our life insurance rates by state below: 

LIFE INSURANCE WHERE YOU LIVE

Term Life insurance by state.

With a Life Insurance policy you can take care of your family the right way.

Should anything happen to you, you’ll want to leave your loved ones a financial nest egg for their wellbeing. Click on your state to find out more.

How Does Life Insurance Work?

The way life insurance works is that you (the insured) will make monthly payments (your premium)
to an insurance company, and if you die while the policy is still active or “in-force,” the insurance company pays out a death benefit to your beneficiaries.  With the national average life expectancy decreasing due to COVID19, it’s essential for everyone to be covered

What Is The Purpose Of A Life Insurance Policy? 

The main purpose of a life insurance policy is to protect your family. If you are the primary breadwinner and you pass away, having life insurance will allow your family to replace your income and maintain their current lifestyle when your life insurance payout arrives. If you pass away the last thing you want to do is leave your family in debt or cause them financial ruin. 

What Are The Different Types Of Life Insurance Policies?

The different types of life insurance policies are term life insurance and permanent life insurance (often referred to as whole life insurance.) While you might have seen several different types of polices, they are all just variations of term and permanent life. 

Term Life Insurance

The most common type of life insurance is term life because of how much more affordable it is than other products and how easy it is to understand.

Term life insurance will have a set term length, usually, 10, 15, 20, 25, or 30 years based on your current and future needs.  Your rates are usually locked in and as long as you make the payments, your policy stays active. 

Permanent Life Insurance 

Whole life insurance is a type of permanent life insurance policy (meaning it lasts for your entire life) and is probably not the best option for about 95% of people searching for life insurance.  

Since whole life insurance never ends, it means that the insurance company knows they will have to pay the death benefit one day.  Because of this, your monthly premiums are going to be ridiculously more expensive then they would be for a term life policy. 

Whole life polices also give you the ability to borrow against the cash value built into the policy; however, I don’t ever recommend that someone use their policy’s cash value for anything. 

Comparing The Different Life Insurance Options

Premiums can go up or be guaranteed level.

Premiums can fluctuate or be guaranteed level.

Policy cancels or has to be renewed at the end of the level term.

Policy pays out at the end of the term along with any additional cash value.

How Much Life Insurance Do I Need?

On average, you will need at least 10x (times) your annual income in life insurance coverage. This will replace your income for your family by 10 years. So, if you make $50,000 per year, at 10x you should have at least $500,000 in life insurance. If you can afford it, at a licensed agent, I suggest going for 15 to 20 times your yearly salary so that your family can have 15 to 20 years of income replacement if you pass away.

How To Calculate How Much Life Insurance You Need?

The best way to calculate your life insurance needs is to figure out what your current financial situation is, and what it would look like if you weren’t around.

You should consider things such as current debt, if you have a mortgage, will you need to cover your kids college tuition, do you have an outstanding car loan.  

Use Our Term Life Insurance Cost Calculator

We created a nifty life insurance calculator that you can use to better understand exactly how much you need. You will still need to have an idea of what your current and future expenses may be but it makes calculating your needs much easier.

What’s The Average Cost Of Life Insurance By Age? 

Below we review life insurance costs by age for three of the best life insurance companies, Bestow, Haven, and Fabric. There are no companies that are faster at giving you a few quotes without personal information and getting you insured without a medical exam. 

Sample 20 Year Term Life Insurance Quotes From Bestow (By Age)

Our Method: The above monthly sample premiums are based on a 20 year term life insurance policy for non-tobacco users in Preferred / Excellent health.

Read our complete review of Bestow life insurance.

Sample 20 Year Term Life Insurance Quotes From Haven (By Age)

Our Method: The above monthly sample premiums are based on a 20 year term life insurance policy for non-tobacco users in Preferred / Excellent health.

Read our complete review of Haven life insurance

Sample 20 Year Term Life Insurance Quotes From Fabric (By Age)

Our Method: The above monthly sample premiums are based on a 20 year term life insurance policy for non-tobacco users in Preferred / Excellent health.

Read our complete review of Fabric life insurance.

While all three companies are a great choice, if you need $1.5 Million or less in coverage you should check out Bestow first.

Not only do they seem to have lower premiums and can get you approved faster, they also have more term length options than other companies.

We also reviewed the top 10 best life insurance companies if you would like to see more options.

What Determines Your Life Insurance Rates?

Tobacco Use – Tobacco use is probably the one item on the list that will give you the largest increase in your premiums. Upwards to 60% or more per month..Age – Your age will also determine what your premiums will be. The younger you are when you purchase life insurance the more affordable it will be.Gender – All things being the same, if you are male, your premiums will be higher than women. This is because women typically live longer than men. Lifestyle – Insurance companies need to be sure that you don’t take too many risks and that if you do, you probably will pay more per month. Things like race car driving or skydiving.Term Length – The term length of your insurance policy will also play a role in how much you pay per month. The lower the term length, the lower your premiums. Health – Your health is the one factor that makes everyone’s premiums different. If you have several health conditions you can expect a higher premium than usual.

How To Buy A Life Insurance Policy Online?

There are some sites that state it will take between four to eight weeks from start to finish to get covered; however, I can as sure you that is no longer the case in 2021.

There are products now that are able to give you a life insurance quote online and get you covered in under 5 minutes and at most a few days.

When buying life insurance it’s best to compare quotes across multiple insurance companies to make sure you are getting the best rate and the most benefits.  We even recommend applying to more than one company so that the insurance companies have to fight for your business.

The application process can be completed in just 4 steps. 

Here’s how:

1

Get your free life insurance quote. Compare and contrast rates from different insurance companies 100% online without getting called from an agent. You should look at both no exam options and fully underwritten options. 

2

Choose your life insurance policy. It’s time to decide how much coverage you can afford and pick your coverage amount and term length.  You should pick a company that has a good rating with A.M. Best and also great customer service.

3

Fill out your “real-time” application. Complete your application entirely online without any agents by answering a few questions. Our online companies offer accelerated or real-time applications so the underwriting happens as you complete your application. 

4

Sign your life insurance policy and pay. Most companies will be able to give you an instant approval or an instant decision on the outcome of your policy.  Once approved you can sign your application and make your premium payments online… That’s it; you’re covered!

How To Pick The Best Life Insurance Company

The worst thing you can do when picking out an insurance company is to go based entirely on price.  While price of course is important, it shouldn’t be the only factor you use to determine which insurance company you will purchase coverage from. 

You should consider things such as: 

A.M. Best Rating – Think of A.M. Best as the JD Power of the life insurance industry.  They rate companies based on their financial stability and claims paying capability.  Customer Service Reviews – You should check out sites like the BBB or Trustpilot to read real customer reviews to get a better understanding of how an insurance company treats its customers.Benefits Included At No Extra Cost – Some companies may offer additional benefits at no-cost such as an accelerated death benefit (also known as living benefits) while others charge an additional fee; it’s best to know what’s included in your policy before moving forward. Available Policy Riders -Some companies may offer riders like the waiver of premium rider or the child term rider and others might not.  

I won’t say that this is the ultimate list of things to consider before choosing a company to get coverage from; however, it’s a great start and will help you narrow down your choices.

Why Trust Simply Insurance?

We make things simple. At Simply Insurance, you get to compare only the top online life insurance companies. We’ve done all the hard work and picked out the top companies so that you don’t have to go through all of the top insurance companies in the nation… I mean, no one really has time for that. 

Years of licensed experience. As licensed agents, we help our customers navigate the entire insurance buying process. We don’t work on commission and can answer any questions you may have in regards to your insurance policy.

Keeping it in “Plain English.” We pride ourselves on creating content that is easy to understand and that doesn’t have a ton of “insurance-ese”. Insurance education is essential to us and we put our customers needs first. 

Frequently Asked Questions

What is the average life insurance cost per month?
The average life insurance cost per month is $22.59 per month for a 40-year-old female and $27.35 per month for a male, both buying a 20-year term policy for $250,000 in coverage and in excellent health. Rates will vary on an individual basis.

Who has the best rates for life insurance?

Bestow life insurance not only has the best rates for life insurance, but they also have the fastest life insurance buying process. They can cover you for up to $1.5 Million in coverage within 5 minutes.

How much is a 500k life insurance policy?

A $500k life insurance policy costs around $26.42 per month for a 35-year-old male in excellent health looking at a 20 year term and $19.75 per month for a female in excellent health looking for the same coverage. 

How much does a $50 000 life insurance policy cost?

A $50,000 life insurance policy costs around $7.63 per month for a 36 year old female in excellent health looking at a 10 year term and $9.21 per month for a male in excellent health looking for the same coverage.