Benefits of Term Life Insurance
Term life insurance is cost-effective and customizable. While you have a range of term lengths to pick from, you can also meet different financial protection goals by laddering different policies.
For example, buying a 10-year $500,000 term policy can offer a large amount of protection while your children are young. Buying a second 30-year $250,000 term policy on top of that provides extra cushion for a longer period of time. This route would be less expensive than purchasing one $750,000 30-year term policy.
Other benefits include riders and the option to convert.
Child Rider – Low Cost
A child rider is an “add on” you can purchase with your life insurance policy that not only covers the life of your children, but it can be converted into a permanent policy later on in life without the child being required to show evidence of insurability.
Most insurance companies enable you to add on a $10,000 child rider for a total annual cost of $50. This one rider covers all children under age 18. Whether you have one child or five, $50 provides $10,000 on each child. It also automatically includes any future children you may have.
The Accelerated Death Benefit Rider – Free
One living benefit rider that is often included on term life policies at no charge is an accelerated death benefit rider. An accelerated death benefit rider allows the policyowner to receive a portion (or all) of the death benefit early when the insured individual is diagnosed with a terminal illness resulting in a decreased life expectancy.
Because the owner can access the death benefit while still living, it’s referred to as a living benefits rider.
This rider can be a blessing to those who need it. You can use this cash anyway you wish. Trying experimental treatments your health insurance may not cover, for example. Or completing your bucket list.
If you use up (accelerate) your entire death benefit amount, your policy will terminate. If you only use up a portion of the death benefit, whatever is remaining will be paid to your beneficiaries upon your death.
Conversion Rider – Free
Term life insurance is the best choice for most families. Ideally, a provider needs life insurance coverage during their working years but can later rely on savings and Social Security benefits to provide for their family after the term coverage expires.
But if your circ*mstances change and you want permanent coverage, you may have the option to convert your term policy into a permanent one. Most term life insurance policies include a conversion option.
You decide when (as long as it’s before the conversion expiry date) and how much coverage to convert. If you only convert a partial amount, you’ll have two separate policies: one term life insurance policy (with a now lower premium) and one permanent life insurance policy.
For example, if you were paying $20 per month for a $500,000 term insurance policy and then you decide to convert $250,000 to a permanent policy, your term premiums will then drop to $13 per month, the cost of having a $250,000 policy. And you will also be paying the premiums for your new $250,000 permanent life insurance policy.
The best part of a conversion option is that your coverage is guaranteed no matter your health status. People who develop a serious medical condition benefit greatly from the conversion rider. The conversion option allows a person to continue having life insurance coverage even if they become uninsurable.
The Easiest Way to Buy Term Life Insurance
Start the process by getting a free term life insurance quote. You can comparison shop over 25 life insurance companies through Quotacy without even giving away any contact information.
Apply online when you’re ready and your Quotacy agent will keep you updated from start to finish. If you have any lifestyle or medical risk factors, your Quotacy agent will also do a second round of comparison shopping to ensure the company you chose through the online process is the best option.
In the future, if you need to make changes to your policy or purchase a new one, Quotacy can help.
Note: Life insurance quotes used in this article accurate as of June 3, 2021. These are only estimates and your life insurance costs may be higher or lower.
FAQs
A $500,000 life insurance policy with a 10-year term costs an average of $62.99 per month for a smoker, compared to $29.26 per month for someone in poor health or $26.88 for someone with a high BMI. This compares to the same rate for a healthy individual, which would cost around $18.44 a month.
How much does a $50000 life insurance policy cost per month? ›
Expect to pay $100-$500 monthly for a $50,000 whole life insurance policy depending upon your age, health, lifestyle, tobacco usage, state of residence, and the amount of coverage purchased.
Is term life insurance the most affordable? ›
Term life insurance is the cheapest type of life insurance policy; the cost of whole life insurance can be significantly higher. With that in mind, here are some of the cheapest companies for a 20-year, $500,000 term life insurance policy covering super preferred applicants.
What term life insurance does Suze Orman recommend? ›
Suze Orman recommends that generally most people should get a 20 year term life insurance policy at 20 times your annual income. What does that mean? That means if you're 30 years old and you make $50,000 a year you should get a million dollar 20 year term life insurance policy.
How much does a $1000000 whole life policy cost? ›
Average cost of a million-dollar term life insurance policy
| Age | Term length | Average monthly rate |
|---|
| 30 | Term length30 years | Average monthly rate$86.57 |
| 40 | Term length10 years | Average monthly rate$47.41 |
| 40 | Term length15 years | Average monthly rate$61.33 |
| 40 | Term length30 years | Average monthly rate$137.89 |
5 more rowsThe average cost for a million-dollar life insurance policy is anywhere from approximately $50 to more than $1,000 a month, depending on your age, health, annual income, policy type and other factors.
How much insurance do you get from Colonial Penn for $9.95 a month? ›
Colonial Penn $9.95 Coverage Calculator
| AGE | 1 Male Unit ($9.95) | 1 Female Unit ($9.95) |
|---|
| 64 | $949 in coverage | $1,313 in coverage |
| 65 | $896 in coverage | $1,258 in coverage |
| 66 | $846 in coverage | $1,200 in coverage |
| 67 | $802 in coverage | $1,167 in coverage |
32 more rowsDec 5, 2023
Top life insurance companies
| Company | Best for | AM Best Financial Strength Rating |
|---|
| Mass Mutual | Whole life insurance | A++ (Superior) |
| Mutual of Omaha | Digital accessibility | A+ (Superior) |
| Nationwide | Customer satisfaction | A+ (Superior) |
| Northwestern Mutual | Universal life insurance | A++ (Superior) |
3 more rows7 Best Cheap Life Insurance Companies for 2024
- Transamerica: Best for affordable life insurance.
- MassMutual: Best for permanent life insurance.
- Fidelity Life: Best for accidental death coverage.
- Nationwide: Best for whole life insurance.
- Pacific Life: Best for universal life insurance.
“Every birthday puts you one year closer to your life expectancy and thus, you are more expensive to insure,” says Huntley. He estimates that rates increase every year by 5% to 8% in your 40s, and by 9% to 12% each year if you're over age 50.
People who buy term life pay premiums for an extended period, but they get nothing in return unless they have the misfortune to die before the term expires. Plus, term life insurance premiums increase with age.
What is the main disadvantage of term life insurance? ›
Term Life insurance Cons: If you outlive the term length, your coverage will end and you won't receive any benefits. You will not be covered your entire lifetime and your policy will not accumulate cash value like an investment account does.
What are the problems with term life insurance? ›
If you outlive the term of your term life insurance, the policy expires and has no value. If you're looking for a way to leave money behind, a term life insurance policy most likely isn't a good fit. No cash value. Term life insurance doesn't build cash value.
Why does Dave Ramsey like term life insurance? ›
Terms may apply to offers listed on this page. Like most financial experts, Dave Ramsey recommends term life insurance over whole life insurance. Whole life is significantly more expensive and unnecessary for most people. Opt for term life instead and use the money you save on premium costs to invest.
What is a good amount of term life insurance? ›
There are several ways to calculate your term life insurance needs. And while no single formula may be right for you, it gives you a place to start. The simplest and most basic method most insurance and financial professionals recommend is to buy at least 10 times your annual income in life insurance.
How much is 500k life insurance a month? ›
Assume that you're a 30-year-old, healthy male and you're interested in getting a 20-year, $500,000 term life policy. If you buy it now, you'll pay around $19 per month on average, or $228 per year. Waiting until age 50 to buy the same policy and you'll be paying around $70 per month on average, or $840 per year.
What is the monthly payment on a 5 million dollar life insurance policy? ›
How much is a $5 million life insurance policy? A healthy 40-year-old woman could pay $251 per month for a $5 million, 20-year term life insurance policy. A 40-year-old man with a similar profile could pay $316 per month for the same coverage. Your age, gender, health, and lifestyle will influence your rates.
Can a average person get a million dollar life insurance policy? ›
Can I get a million dollar life insurance policy? If you are reasonably healthy, you will likely qualify for a million dollar policy, and if you're in your 20s, 30s, or even 40s, the cost may be lower than you think for term life coverage.
How much does $250000 worth of life insurance cost? ›
Key Takeaways. The average cost of a $250,000 policy is $23 per month for a 10-year term and $29 for a 20-year term. It's best to compare rates since factors like your health, gender, lifestyle and age influence the price of your life insurance policy.
