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What you need to know about life insurance



How much will life insurance cost me?

Policy owners pay a certain amount, known as premiums, to keep their life policies in force or active. Premiums will differ between insurance companies and they will also differ between different types of insurance and how much coverage you get.

The insurance company determines the premium costs using statistics and mathematical calculations made by the insurance company’s actuarial department. But not all insurance companies use the same pricing guidelines. That’s why working with a life insurance broker is the best way to ensure you get the best price on life insurance.

Life insurance brokers work with many different life insurance companies, versus being loyal to just one. Brokers can shop around to ensure you get the best deal based on your risk factors.

When you apply through Quotacy, your agent reviews your application and makes sure you are matched with the insurance company that offers the best price.

Let̵

7;s take a look at some examples to illustrate the cost of life insurance.

Example 1:

James is 35 years old and lives with his wife Anne. They are currently working on paying off their $250,000 mortgage and he also has $50,000 left in student loans and $10,000 left to pay on his truck. He and Anne currently have no children and do not plan to.

Here are his answers to the life insurance needs calculator questions:

  1. What is your annual income? 70,000 USD
  2. How many years of income do you want to replace? His wife works full time and with no mortgage payments, he decides she could be financially stable again in two years.
  3. How much do you owe on your mortgage? $250,000
  4. How much additional debt do you have? $60,000
  5. How much do you want to contribute to the children’s college costs? $0
  6. How much money will be needed for a funeral/funeral? $10,000
  7. How much money do you currently have in savings and investments? $25,000
  8. How much life insurance do you already own that you plan to keep? $0

Using the calculator, James needs insurance equal to $450,000 in coverage. He would like to have this coverage until he and Anne retire, so he chooses a 30-year term. Using the quote tool on Quotacy, we can estimate his monthly premium payments to be around $32, if he is a non-smoker and has no health issues.

Summary: A $450,000 term policy that lasts until James turns 65 will cost him $32 per month.

Example 2:

Tim is 30 years old and lives with his wife Lucy and their two young children, one of whom has been diagnosed with Down syndrome. Since their child will likely need special care for the rest of their lives, Tim decides on whole life insurance to ensure that the family will always be financially protected.

A $250,000 whole life policy for a healthy 30-year-old man has an estimated monthly premium of $238. When the policy matures, cash values ​​will accumulate that Tim can use to pay for any needs that arise, such as medical bills.

However, accessing the cash value will reduce the policy’s death benefit, unless he repays the loan against the cash value before he dies.

Owning whole life insurance ensures that when he dies, there will be funds available so that his children continue to receive the best care.

Whether you just need simple term life insurance or have more complex needs better served by a permanent policy, Quotacy can help.


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