Cost & Coverage
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Not sure what life insurance will cost you? Crunch the numbers with our free, easy-to-use life insurance calculator.
Ready to shop for life insurance? Whether you’re just getting started or ready to compare and buy, figuring how much you need and what it’ll cost you will help ensure you’re making the right choice. Use our free calculator and tips below to
Once you’ve completed these steps, you’ll get our recommendation for your term length and coverage amount. If you have a spouse, their recommended term/coverage will be included as well. After reviewing those numbers, you can click the button to get instant online quotes and compare policies from over 12 top-rated insurers.
You’ll notice different suggested policy lengths and coverage amounts. Most financial planners suggest covering your longest financial obligation but you do have the option to choose term and whole life insurance. While whole life insurance accumulates a cash value over time, it’s usually **6-10 times** more expensive. Most people opt for term life and look into other means of investing and growing their money.
As Patrick Hanzel, Policygenius’ Advanced Planning Specialist and Certified Financial Planner explains, "Due to the complexity and pricing of whole life insurance policies, term coverage is the recommendation for the vast majority of people. Permanent coverage is usually only suitable for people who have a significant income or assets, complex estate planning needs, or a special needs dependent."
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Before we had tools online to help us figure these things out, the first step in getting life insurance was to sit down with a financial adviser or life insurance agent and do a life insurance needs analysis worksheet.
This basically consists of:
The remaining number is the coverage gap — the amount your family would need to be financially comfortable in your absence. This is the coverage amount you should select as the death benefit. The amount of time your family will require coverage is called the term.
Two final things to take into account when making a life insurance calculation:
First, the payment your beneficiaries receive is tax-free, so you can use your after-tax (take-home) pay to calculate your income replacement needs.
Second, remember that the death benefit gets paid upfront, but your beneficiaries won’t use it all at once. Much of it can be invested, and the rate of return can provide additional income to make the benefit last longer. However, you’ll also want to consider the inflation rate over a 20- or 30-year term.
Learn more about how much life insurance you need.
The good news is that most people overestimate the cost of a term life insurance policy by at least 2x to 3x. There are a number of factors that determine your life insurance premium, including:
A healthy 30-year-old male who purchases a 20-year term policy with a $500,000 death benefit can expect to pay approximately $28.58 monthly.
All life insurance companies offer the same financial protection, and thanks to regulations they’re all guaranteed to pay if the worst happens (with some rare exceptions for self-inflicted injury, fraud and crimes). So how to know what life insurance company you should go with?
Simple: whichever one gives you the best rate. Life insurance companies offer the same product, but they have different methods for measuring risk. One company may see you as risky to insure, while another may see you as a relatively safe bet. Therefore you may get a wide range of life insurance quotes from different providers.
Here’s a look at the rates from 10 different companies for that same 30-year-old male we mentioned above, who is looking to purchase a 20-year term policy with a $500,000 death benefit:
|Mutual of Omaha||$28.17|
So it’s important to compare quotes from as many life insurance carriers as possible before buying a policy. You can use our tool to compare unbiased, accurate quotes from the nation’s top insurers tailored to your specific profile. Get started in minutes today.
Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.
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Yes, we have to include some legalese down here. Read it larger on our legal page. Policygenius Inc. (“Policygenius”) is a licensed independent insurance broker. Policygenius does not underwrite any insurance policy described on this website. The information provided on this site has been developed by Policygenius for general informational and educational purposes. We do our best efforts to ensure that this information is up-to-date and accurate. Any insurance policy premium quotes or ranges displayed are non-binding. The final insurance policy premium for any policy is determined by the underwriting insurance company following application. Savings are estimated by comparing the highest and lowest price for a shopper in a given health class. For example: for a 30-year old non-smoker male in South Carolina with excellent health and a preferred plus health class, comparing quotes for a $500,000, 20-year term life policy, the price difference between the lowest and highest quotes is 60%. For that same shopper in New York, the price difference is 40%. Rates are subject to change and are valid as of 2/17/17.
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