Buying life insurance is a smart financial move that can help provide peace of mind for you and your family. Unfortunately, many people mistakenly believe that the cost of life insurance is higher than it actually is, and sadly, that can prevent people from securing their family’s future. The truth is, for many people, life insurance is affordable and can be more or less expensive based on factors like the type of policy and the amount of coverage you choose.

We’re here to help you understand the factors that influence the cost of life insurance and offer ways to get the most affordable policy to fit your needs.

Average term life insurance costs

Term life insurance is the most popular life insurance option for a good reason. Term policies offer flexible coverage for up to 30 years, and coverage ends when the term ends. That makes a term policy an affordable option to cover a specific debt burden, like a mortgage, or provide income replacement for a season of life, like when children are in school.

A 30-year-old female in great health could lock in a $500,000 30-year term life insurance policy starting around $40 a month, or less than $500 a year. For a man of the same age and health, a comparable policy may run about $50 per month, or closer to $600 a year. Paying premiums on an annual basis may further reduce the cost.

Shorter-term policies (as is shown in the table below for 10-year terms) are generally less expensive, but enrolling in a long-term 20- or 30-year policy when you’re young could end up locking in affordable rates for the entirety of the term.

How much life insurance coverage do you need?

The amount of life insurance coverage you need depends on the policy’s purpose. For example, if you’re looking to replace income to support your family, a good rule of thumb is to get a policy for seven to ten times your annual salary. On the other hand, if you’re using a policy to cover final expenses , pay off a debt, or leave a legacy, you’ll want to base the coverage amount on those unique financial needs.

Fidelity Life’s Life Insurance Calculator asks a few questions to help you understand the coverage amount that may be right for your needs.

Once you decide on the desired coverage amount, you can determine the overall life insurance cost. Generally, more coverage means a higher premium.

Comparing costs of whole life and term life insurance

Term life insurance tends to cost less than whole life for a few reasons. Whole life insurance lasts a lifetime, assuming premiums are paid. Plus, it has the dual benefit of offering a death benefit and the ability to accrue cash value.

For some, these benefits of whole life insurance may justify the cost. But keep in mind there are some ways to reduce the cost of term life insurance, too.

How to reduce term life insurance costs

There are several ways to reduce the cost of a term life insurance policy, including:

• Enroll during your 20s or 30s: Younger applicants in their 20s or 30s typically  get the most favorable term life insurance rates since they tend to be in better health.
• Keep a healthy lifestyle: If you’re in good health, favorable results on a medical exam could qualify you for lower rates. With Fidelity Life’s RAPID ecision® Life plan, you’ll have six months to take a medical exam, or possibly even have it waived.
• Abstain from risky behaviors and tobacco use: Life insurance costs increase if you’re a smoker, regularly participate in risky hobbies, or have a driving record indicating a pattern of infractions or DUIs.
• Choose a smaller death benefit: Policies for a lower coverage amount will be less expensive.
• Choose a policy with a shorter term: A 10-year term life insurance policy will generally cost less per month than a 20- or 30-year term.
• Pay annually: Some insurers offer a discount on premiums if you pay a lump sum amount annually as opposed to making a payment each month.

Get a life insurance cost quote

The only way to know your life insurance cost estimate is to get a quote. Fidelity Life has a range of affordable policies to suit your financial needs and is ready to get you a free life insurance cost quote today.