Budgets and Money

Is Life Insurance Expensive?

Most people overestimate the true cost of life insurance. Because of that, it's important to do your homework to get better informed on pricing and what policy types fit your budget.

According to the Life Insurance research organization, LIMRA, more than 80 percent of Americans polled tend to overestimate the cost of life insurance.  In fact, 86 percent of consumers who know they need life insurance haven't purchased a policy because they think it's too expensive.

To illustrate this point, LIMRA's 2014 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 average estimate given by those surveyed was $1,000 - nearly 10 times the actual cost of $150 a year, with nearly one-in-five consumers in the same 25-year old age group estimating the same policy at higher than $3,000.

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. For more information on how to shop for life insurance, visit the Protective Life Insurance Learning Center.


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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.

Life Insurance

Too many people aren't buying the life insurance they need because they think that life insurance is too expensive. Today, life insurance is more affordable than ever. However, you won't know until you take the time to discuss your individual needs with a qualified life insurance agent. Find out what type of life insurance best meets your needs. For more information, visit our learning center.