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What’s Busting Your Life Insurance Budget?

If you are avoiding purchasing life insurance because you think you can't afford it, think again. Research shows that by eliminating some non-essential expenses, you can indeed budget for life insurance.

Life Insurance Budgeting

Affordable Life Insurance

A 2015 study conducted by Life Happens and the Life Insurance Management Research Association (LIMRA), revealed that 65 percent of American households don't have life insurance because they think it's too expensive. Unfortunately, many people tend to overestimate the cost for coverage.1

For example, when asked the premium of a 20-year, $250,000 term policy for a healthy 30-year old, eight in 10 people estimated $400 a year, with one in four guessing an annual cost of greater than $1,000. The reality is that the average cost would be much closer to $160.00 a year - or just a little over $13.00 a month according to the study.

If this comes as a surprise to you, you're not alone. And, if you don't think that your budget will budge enough to afford a small monthly life insurance premium, then consider what you spend on other non-essentials that will typically cost you more than $13.00 a month. Here are just a few examples to get you thinking:

  • A week's worth of coffee at Starbucks.

    A 16 oz. cup of brewed coffee at Starbucks averages $2.10.2 If you buy a cup a day, Monday through Friday, that's $10.50 a week. Multiply that by four, and you get a grand total of $42.00 a month. Try USA Today's coffee cost calculator to estimate how much you spend on coffee and if brewing it at home is a good tradeoff for being able to afford life insurance.

  • The latest video game.

    According to MSNBC.com, a new video game averages $49.99.3 If you don't think you can afford a life policy, you might consider trading the newest game release for the security and peace of mind that life insurance can bring.

  • A new outfit.

    How much do you spend on new clothing every month -- $25, $35, $50, or more? Foregoing a new pair of jeans or shoes when you already have a full closet can be that little extra you need to be able to afford a life insurance policy.

  • Tobacco.

    The average cost for a pack of non-generic cigarettes (as of 2014) is $6.28, including federal, state, and local excise taxes.4 If you only smoked a pack a week, that's a little over $25.00 a month. Kicking the habit is not only beneficial for your health, but for your wallet as well.

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There are just a few examples of expenses you may want to consider adding back to your budget if you'd rather have a life insurance policy. If you'd like to read more about finding affordable life insurance, visit the Protective Learning Center.

2Coffee cost calculator Starbucks estimates are based on a 16-ounce Grande coffee at $2.10 per cup. Home-brewed estimates are based on the average cost of Folgers and Maxwell House ground coffee for a 16-ounce serving.

3http://www.nbcnews.com/id/3078404/ns/technology_and_science-games/t/top-video-games-may-soon-cost-more/#.Vr5nRo-cGUk

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Budgeting for Life Insurance

Don't think you have enough in your budget to afford life insurance? This article looks at a few examples of common, everyday expenditures that many people spend money on each month that could be set aside for a small life insurance policy. For more information, visit the Protective Life Learning Center.


All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.

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