While we'd never phone you average, we thought you might like to know that, based on a Georgetown University study, the average American without a high school diploma earns nearly $1 million in their lifetime. While you would probably guess, individuals with additional education earn more. All of which is to state that, while a half-million dollars might sound just like a lot – which is – it's a less imposing figure when considered over the course of your daily life.
Which brings us to life insurance. When you're buying life insurance, you need to be conscious of selecting a policy amount that covers more than end-of-life expenses (like burial and a funeral). Additionally you have to consider decades of expenses when reviewing life insurance quotes, if you were to pass away suddenly. These expenses may include things like mortgage repayments, childcare, health care costs, not to mention, education needs which will repay for your loved ones down the line using your death benefit.
But how much does $500,000 worth of insurance policy cost? And is a $500,000 life insurance coverage enough coverage? Once we often say, life insurance is among those activities where more isn't necessarily better. This is exactly why we've come up with this guide with strategies for determining how much coverage fits your needs. And when it turns out a $500,000 life insurance policy makes sense, we'll also inform you the best way to purchase a policy and what else you might need to consider for the financial protection. Let us get to it, we could?
How much life insurance coverage will i need?
Before getting into the price, it's worth asking who actually needs a $500,000 policy to cover their financial obligations. A common rule of thumb would be to have coverage that's 5 to 10 times your annual salary. That will suggest that a $500,000 policy could be right for someone who earns between $50,000 and $100,000 annually. The reason behind the wide range is that your exact policy needs depend on age and quantity of your dependents, along with other factors, like what debts you have as well as your partner's income. You will be able to review these 4 elements further together with your insurance carrier.
Nonetheless, for most people, the rule of thumb is a useful starting point. If you're the type who likes your life insurance requires a bit more personalized to you (most people do), you may also make use of an online life insurance calculator. It'll calculate the face amount and term length needs based on your loved ones structure and finances.
What does a $500,000 life insurance policy cost?
Most things that are worth $500,000 cost $500,000, but that is incorrect with term life insurance. As for exactly what does a $500,000 policy cost, there's two definitive solutions to the question: The very first is, “It depends, but it is easy to find out.” And also the second is: “a lot under you probably think.”
The easiest way to get a concept of how much a $500k life insurance coverage will definitely cost is to use a totally free online quote tool. Utilizing a quote tool you'll notice that a proper 35-year-old woman can purchase a 20-year, $500,000 Haven Term policy for around $20 monthly.
The price for a lifetime insurance coverage is impacted by several different factors, most of which you can't control (like your age), plus some of which you are able to. Three important aspects are your age, your wellbeing, and the entire term.
The younger you are, the less you'll purchase life insurance coverage, that is a strong argument for getting it sooner, instead of later. The rate for a policy goes up as you become older since your age increases and logically, your wellbeing, well, decreases. For example, a guy in excellent health, looking for a 20-year, $500,000 policy:
- If he's 35, he'll pay around $23 a month
- If he's 45, he'll pay about $56 a month
The main point here is… the better your health, the less you have to pay. Take the example of a 35-year-old woman searching for a 20-year, $500,000 policy:
- With excellent health, she pays around $20 a month
- With average health, she pays approximately $44 per month
Smoking will even negatively impact your lifetime insurance rate. If that same woman smokes:
- With good health, she pays around $78 a month
- With average health, she pays close to $105 a month
The longer you would like coverage for, the greater your lifetime insurance quote will be. A 35-year man in excellent health, looking for $500,000 of coverage pays:
- About $16 per month for a 10-year term
- Approximately $17 a month for any 15-year term
- Around $23 per month for a 20-year term (a popular term length for our mid-thirties to early-forties customers)
- Approximately $41 a month for a 30-year term
So does this mean you should get a 10-year policy rather than a 20-year policy and save yourself some cash? Probably not. The duration of your term ought to be based on the period of time your dependents will require insurance coverage. For those who have young children and want to make sure they're cared for financially if you die unexpectedly, that may mean you'll need a long term length than if you just have a few lingering debts that you count on paying off in the next ten years.
Additionally, this is when the discussion of term versus whole life makes consideration. Permanent policies (like whole and universal life) offer coverage that lasts an eternity in addition to a cash value ingredient that can grow over time. However, these policies can be expensive compared to term policies.
A 30-year-old woman in excellent health would pay about $30 monthly for a 30-year, $500,000 Haven Term policy. A $500,000 whole life policy for that same woman would be about $411 monthly [Source: State Farm]. Below you will find our term life insurance rate chart.
Quotes for any $500,000 term life policy
How do I purchase a $500,000 policy?
As with any insurance coverage, the process of getting a $500,000 term life policy begins with getting a quote and then completing an application, both of which that you can do online with forward-thinking life insurance coverage agencies like Haven Life.
Just know that you will likely pay less for a policy that is medically underwritten, which means that the insurer is going to look at factors such as your way of life, health, and health background to find out eligibility and pricing. For most people, medically underwritten policies are less expensive because prices are according to your wellbeing and other known factors so the insurer takes on less risk in the lack of unknowns. With this type of policy, you can expect to have to take a medical exam to finalize coverage, but there are some situations where you may qualify for a no medical exam buying experience. Once a credit card applicatoin is submitted, you will know whether a health check is needed. [Please keep in mind that payment of a policy's benefits may depend on the truthfulness of answers provided within the application.]
If you have to have a health check to finalize your lifetime insurance rate and coverage, it takes approximately 20 minutes and can be scheduled at a time and place of your choosing. Also, the insurer offer your temporary insurance coverage to financially protect you when you wait to accomplish your exam and obtain your final decision.
Is my life insurance policy dependable?
If you've spent even a little time looking for a life insurance coverage product, you know that you have a lot of options when selecting your life insurance provider. One method to narrow down those options is as simple as consulting ratings from third-party agencies. These agencies analyze an insurance coverage company's financial strength, and their ability to fulfill their contractual obligations to pay out a policy – and they achieve this independently, so that you can trust their assessments. Typically, you can find a life insurance coverage company's ratings on its website; you can also check out life insurance reviews from customers.
Finding the right coverage for you.
Even though $500,000 sounds like a lot of money, you might well discover that you need that much. We find the average life insurance policy that a Haven Life customer purchases is about 20 years and $600,000. The price of a policy will be different according to your individual circumstances, but it's simple to find out time, and one from the great things about life insurance coverage is you do not get what you purchase – you get more by way of peace of mind.