III: Life insurance costs often overestimated
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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.
Related: Ultimate guide to buying life insurance
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
Posted in: Life Insurance, Life Insurance Rates
Life Insurance News: This article was published on 6-26-2012 at 1:36 pm.
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