What Are the Average Term Life Insurance Rates?

Life insurance isn’t exactly one of the most pleasant topics to consider, since it forces you to examine your own mortality, but if you haven’t thought about getting a life insurance policy in the U.S. yet, it’s probably a good idea to start. Essentially, you buy a policy from an insurance company in exchange for monthly premiums, and if you should die while the policy is active, your beneficiaries will be financially protected thanks to the death benefit of the policy.

A life insurance policy helps provide for your spouse or other beneficiaries when they have to cover funeral expenses and other financial obligations. You shouldn’t necessarily wait to have a family before you start considering life insurance, though. It can be easier to get a higher coverage amount at a lower price when you’re younger and in good health, and you’ll also be more likely to pass any required medical exam without issues. If you’re worried that life insurance costs will be too high in your younger years, you may be surprised to learn that there are affordable options. One of these is term life insurance.

What is a term life insurance policy?

As the name suggests, term life will provide a death benefit to the insured for an agreed upon period of time. Terms are usually set in increments of 10 years, but you may be able to purchase a policy that renews each year in exchange for higher premiums. It’s important to note that a term life policy only provides a death benefit for the insured. If you’re looking for a savings or investment component in your life insurance policy, you’ll generally need to look for a form of permanent whole life insurance.

The main draw to this type of life insurance is that it tends to have the lowest monthly premiums around, which makes it a great option for younger people who may not be financially secure yet. You can always convert a term life insurance policy to a whole life insurance policy later, so a term policy is a perfect starter option. It’s also a great option for those who only need life insurance for a limited time as they work towards a financial goal, such as sending children to college.

Your premium payments for this insurance product will mostly depend on how much coverage you need and how long you need it for, your health and age at the time of purchase, and your lifestyle, but different insurers will always have different rates. Fortunately, you can check term life insurance rates online to figure the average rates and find a suitable policy.

What about additional benefits?

If you’re looking for a policy with similar rates to term life insurance but with some added benefits, you’ll likely want to go with a form of universal life insurance. These policies tend to have a low monthly premium rate, but they’ll also provide a savings component to accrue cash value or an investing component. Consider variable life insurance, for example.

This type of insurance will provide a death benefit to your dependents, and it can also build cash value thanks to subaccounts that act similarly to mutual funds. Like with most permanent life insurance plans, you can boost the cash value by paying premiums ahead of time and investing more money in the policy. It’s just important to remember that market changes may impact your cash value for better or worse. Variable life insurance has the potential to build financial security faster than other policies, but it’s also the riskiest due to market volatility.

Don’t forget to read over any exclusions carefully before signing on for a life insurance policy. They’ll generally have exclusions for deaths caused by suicide and illegal activities, but you’ll want to be sure you understand everything before the underwriting process begins.