III: Life insurance costs often overestimated
Many overestimate life insurance costs
Term life insurance can be a cost-effective financial solutions for many families, the Insurance Information Institute (I.I.I.) said in a recent report.
Problem is, according to the results of a recent survey by LIMRA and the LIFE Foundation, many consumers overestimate the costs associated with obtaining life insurance coverage.
Respondents to the survey estimated that the cost to obtain a $250,000 term life insurance policy for a healthy 30-year-old (term of 20 years) would be about $400. The actual annual premium would likely be closer to $150 in that scenario, according to LIMRA and the LIFE Foundation.
“Term life insurance can provide beneficiaries with a very cost-effective form of financial protection,” Michael Barry, vice president of Media Relations at the I.I.I., said in a statement.
See also: Whole vs. term life insurance
Term life insurance is the most affordable type of life insurance, as it provides protection for a specific period of time as opposed to more expensive permanent life insurance policies that offer lifelong coverage.
In the report, the I.I.I. also offered up some quick tips to help those considering buying a life insurance policy. According to the I.I.I. the face amount value of a life insurance policy should be enough to:
- Replace income currently generated for beneficiaries.
- Replace employer-provided benefits like health insurance.
- Cover death-related expenses like funeral costs.
See also: Comprehensive Life Insurance Calculator