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Life Insurance Basics

Cost of life insurance

Most people overestimate the true cost of life insurance. Here’s how to get smarter about what works for your budget.

Is life insurance as expensive as people think?

According to the Life Insurance research organization, LIMRA, 66 percent of Americans polled said they did not purchase life insurance because it's too expensive.  However, the survey also found that consumers often overestimate the cost of life insurance.

To illustrate this point, LIMRA's 2017 Insurance Barometer Study asked individuals what they felt the price of a $250,000 level-term life insurance policy would be for a 30-year-old person in good health. Surprisingly, the median estimate given by those surveyed was $500 - more than three times the actual cost.

The findings from this study reveal an astounding lack of awareness about the true cost of life insurance. For this reason, it's important to do your homework and get better informed about, “ how much life insurance do I need,” what policy type will best fit your budget, and to compare rates with reputable life insurance companies.

Because life insurance premiums are based on a variety of factors (your age, overall health, whether you smoke, family history, etc.), you can't predict the exact amount you may be looking at. However, the earlier you purchase a life insurance policy and the healthier you are, the more affordable it tends to be.

The bottom line is that while premiums for life insurance can vary greatly, you'll never know what that cost may be if you keep putting it off. A qualified life insurance agent or company service representative can run quotes based on your individual needs, and recommend what type of policy is best for you.

 

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