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Life Insurance Costs

Life insurance is often neglected by consumers because they fail to recognize its importance. There are two main types of life insurance including term and permanent life insurance. Permanent life insurance is about 10 times more costly than term life insurance. The permanent life insurance offers cash value, which can be withdrawn at the end of the term. Term life insurance does not offer cash value savings. It only protects the individual for a short term, for example, 10, 20 or 30 years. At the end of the term, the policy holder will not be rewarded with interests and capital from the insurer.

The life insurance cost depends on several factors age, bad habits, illness, and benefits included in the policy. If you are a smoker, you will be charged with a higher premium. People that suffer from chronic illness such as diabetes, heart attack, high blood pressure and etc will also be charged with expensive premium because of the higher level of risk associated with their health.

Some insurance companies charge a hidden fee. The hidden fee is usually mentioned in the insurance policy agreement. If you buy permanent life insurance, you will have to pay for additional fees. Holders of the term life insurance don’t have to pay for additional fees.
The average cost of the permanent life insurance is $1000 - $2500 per year. With permanent life insurance, a portion of your premium will be deposited in your cash value account. The rest of the premium is used to pay for the administrative fees and commissions. Term life insurance is much cheaper and cost about $500 per year. Term life insurance can be renewed each year for a fee.

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