Life insurance is something that all Canadians need. You never know when something is going to go wrong and you want to make sure that your family is protected to the fullest. With that being said, you should go above and beyond to make sure that you have an ample amount of life insurance. If you do and you pass, your family will be cared for. They’ll have money to maintain a high-quality life and they’ll be able to cover your funeral expenses without too much trouble. The only problem is the fact that life insurance can be very expensive.
How much will you end up paying for life insurance? Ultimately, the answer will depend on numerous questions. Within this guide, you’re going to learn more about the average cost of life insurance. And, you’ll learn more about the factors that may impact your premiums.
The Basic Averages
It is tough to know how much you’re going to pay. The insurance company will analyze numerous factors to determine how much to charge. With that being said, you will need to work with an insurance company to find out specifically how much you’re going to be charged for life insurance. Nevertheless, you should rely on the averages. This will give you an idea of how much you’ll end up spending on insurance. For a standard 20-year policy, you will end up paying $126 per month. Again, this is not the exact amount that you’ll pay.
It will vary based on your health, family health history, occupation, and other things. With that being said, you should think about working closely with an insurance company. Sim Gakhar can help you find an insurance company that will be worth your time and energy. By working closely with an agent, you’ll be able to require a quote so you’ll know exactly how much your premiums will be.
Factors That Matter
At the end of the day, you have to understand that insurance companies are going to do everything possible to save money. They’ll make sure that their clients are paying the appropriate amounts. They’ll make sure that they’re charging enough to make money. With that being said, they will evaluate your situation and determine how much of a risk you are. To do this, they’re going to look at several factors including your age, occupation, and other things. Below, you’re going to learn more about the factors that they’ll consider when trying to set your premiums.
Age is vitally important. After all, an older individual is much more likely to pass away. With that being said, you can expect to pay a lot more as you get older. It is best to sign up for insurance when you’re younger to prevent the prices from skyrocketing. As you continue to age, you can guarantee that the premiums are going to consistently increase. Another thing to note is that the premiums will increase slower when you’re younger. If you’re between the ages of 25 and 30, the premiums will likely increase by 2%.
When you reach the age of 60 or 65, the premiums are going to jump by as much as 90%. Again, you’re going to pay a lot more money as you get older. If you’re 25-years-old and you do not smoke, you will likely end up paying $25.00 a month for life insurance. If you’re a smoker, you can guarantee that the premiums are going to be much easier. Once you reach the age of 65, you can expect to pay more than $470 a month for life insurance. If you smoke, you’ll pay a lot more. The average premium for a smoker who is 65 years or older is right around $1,600.
While you cannot decrease your age, you can minimize your premiums by putting a stop to your cigarette smoking habits. It might be difficult but it will pay off dividends in the long run. If you want to avoid paying too much for insurance, you should stop smoking cigarettes. It is estimated that smokers will end up paying premiums that are more than 300% higher than nonsmokers.
Another thing to note is that your gender will play an important role in determining how much you’re going to pay. There is a lot of talk about gender equality but this goes against the grain. In this category, men are going to end up paying a lot more than women. When it comes down to it, the life expectancy among men is lower than that of women. This is why men are going to end up paying more for life insurance than women. Simultaneously, you have to understand that most men work dangerous jobs.
This increases the likelihood that they’re going to experience an accident at work. In the most severe situations, that accident could lead to their death. The insurance companies understand this and that is why they’re going to charge men higher premiums than women. If you’re a man around 30 years of age and you want a $250,000 policy, you will end up paying $200 a month. Women will pay roughly $25 less for the same policy.
At 50 and trying to acquire a $1,000,000 policy, a man will pay right around $2,100 for insurance. A woman will pay roughly $400 less. With that being said, men will likely always pay more than women. Again, this is not something you can change. However, you may be able to minimize the costs by working out, exercising, keeping yourself in good shape, and not smoking.
At the end of the day, you have the freedom to customize your plan and you’ll want to do just that. There is a good chance that you’re worried about overpaying for insurance. You may want to budget and spend less to ensure that you have enough money to care for your family right now. Well, you should know that you can manipulate the price of your insurance by adjusting the size of the coverage. However, you have to be careful about underpaying too. If you do not get enough insurance, you’re going to leave your family in a compromising situation when you pass away.
With that being said, you should speak with a professional like Sim Gakhar. By working with someone who fully understands the insurance industry, you can guarantee that you’ll be able to get the answers you need. You’ll also have a much easier time getting the precise amount of coverage that you need. If you want maximum coverage, you’re going to pay more for it. If you try to get a $1,000,000 policy, you will spend more than $1,000 on premiums. If you decrease the coverage to $500,000, you will be able to minimize the premiums to $600 or so.
Again, there is a fine line here. While you shouldn’t feel obligated to get too much insurance, you have to make sure that you have enough. If you do not, you will leave your family in a tough situation and you do not want to do that.
Unfortunately, a lot of people smoke cigarettes or chew tobacco. Despite knowing the risks, you continue this activity. You cannot stop it. This is a major problem and it is going to decrease your life expectancy. On top of that, you have to understand that smoking is going to cause problems elsewhere too. If you smoke cigarettes, you’re going to be spending a lot of money on them and you’ll end up paying more for life insurance too.
As a smoker, your chances of dying sooner are elevated significantly. Simultaneously, there is a greater chance that you’re going to get sick. With that being said, the insurance company knows this and they’re going to take the risk. They’ll charge smokers more to ensure that their risks are leveraged. With this in mind, you should try to stop smoking. If you’re able to put an end to your smoking habits, you will be able to minimize your costs immediately. Again, it is estimated that smokers will end up paying 300% higher premiums than nonsmokers.
If you’re able to stop smoking, you will do yourself a lot of favors. You’ll likely live longer and you will be able to decrease your premiums too. Quitting cigarettes is a win-win for you!
Insurance companies are going to look at numerous things when considering how much you should pay for insurance. While you may not realize it, your occupation will make a big difference. After all, some jobs are more dangerous than others. If you’re going to be working in the mines or you’re a police officer, you’re going to be putting your life on the line every day. Therefore, covering you with insurance is going to be a greater risk for the insurance company. They’ll offset this risk by charging you a much higher premium.
While you might not be able to avoid this price hike, it is something you need to remember. By knowing what is going to impact your insurance premiums, you’ll have a much easier time knowing how much you’ll end up paying.
Expiration Date (Term Length)
Term life insurance is available in terms. Most insurers offer terms ranging from five to 30 years. It is up to the policyholder to determine which option will suit their needs the most. Many policyholders will opt for a term life insurance policy between 10 and 25 years. They utilize the policy as a form of protection for their beneficiaries until they can pay off their mortgage, credit cards, and other large debts. Others will opt for the longest term length because they know their beneficiaries will need the death benefits to cover their expenses, regardless of their time of death.
It is crucial to note that the term length of a term life insurance policy will have an impact on the monthly premium. The longer the term length, the higher the monthly premium will be. With that said, most life insurance policies are affordable products. So, even if you opt for a longer-term length, you should be able to afford the premium.
To determine the monthly premium of each term length, you will need to obtain a free quote from your insurance company. To give you an idea of the monthly rate for different term lengths, we have broken them down in the article below.
Term Life Insurance – 10-Year Policy
10-year term insurance policies are very popular among entrepreneurs, seniors, and workers nearing retirement. It is also a great option for people in the low- and median-income ranges. The policy will cover a 10-year period. If you are declared deceased within the term limit, the insurer will pay the death benefits to your beneficiary.
A 10-year term life insurance policy is very affordable. You can contact Sim Gakhar to determine your monthly premium. Remember, the term length is not the only factor that impacts the monthly premium of life insurance.
Term Life Insurance – 20-Year Policy
A 20-year term insurance policy is more suitable for individuals who need longer coverage. For example, if you need life insurance coverage until you start receiving your retirement living funds or retirement investment funds, this policy may be exactly what you need. We recommend this policy for people with a 20-year mortgage, school loans, multiple credit card payments, and co-sign and other large debts.
Term life insurance is a great tool for those who do not want their debts to fall on their loved ones after they are deceased
Insurance Enrollment Rates
When it comes down to it, things have changed a lot over the years. If you take the time to speak with people, you will find that many are not interested in having insurance. And, a lot of this has to with the costs. A survey carried out recently found that roughly 35% of people questioned did not have life insurance. More than 40% of these individuals said that life insurance was too expensive and this is why they didn’t bother. Simultaneously, you should know that baby boomers are worried about the costs too. More than 50% of baby boomers or people between the ages of 54 and 72 did not have life insurance because the prices were too high.
You have to understand that there are ways to avoid these steep increases in the future. All you have to do is sign up for a plan when you’re young and hang onto that plan for the rest of you’re life. If you’re able to do that, you might be able to keep the premiums to a minimum. Either way, life insurance is very important for everyone in Canada. If you want to protect your family and make sure that they’re cared for, you need to make sure that you have some type of life insurance.
Ways To Minimize The Costs
Most people are worried about the expensive costs of health insurance. There is a good chance that you feel the same. Well, you should know that you can minimize the costs. There are numerous ways to achieve this goal and it will pay off dividends in the long run. One thing that you should do is stop smoking. If you’re a smoker, you’re going to pay a lot more for life insurance. On top of that, you’ll place yourself at a greater risk of experiencing illness. There are other ways to minimize your costs too.
For instance, you should start working out and exercising. By doing so, you will be able to improve your health and your physical exam will look must better. Since you’re healthier, the insurance company will provide you with lower premiums. You also have to remember that the insurance company is going to consider your driving record. People who get a lot of tickets and get into many accidents are going to pay more for health insurance. With that being said, you should avoid getting traffic tickets and infractions.
Do that and you’ll be able to minimize your insurance.
The Various Types
Remember that there are numerous types of insurance. The type that you get will depend on your health and your tobacco use. The type that you get will help determine your overall prices. With that being said, you need to make sure that you take steps to improve your health. Simultaneously, you’ll want to learn more about these insurance types.
- Preferred Plus – If you want to get a preferred plus policy, you cannot use tobacco for five years. You must not have any major medical issues. And, you should keep your cholesterol levels below 200 and your blood pressure should not exceed 130/80.
- Preferred – A preferred policy will be slightly more expensive but it is not as difficult to qualify for. With this policy, you cannot use tobacco for three years. You shouldn’t have any health issues and your health should be above average. Finally, your cholesterol should be below 240 and your blood pressure cannot exceed 135/85.
- Select – Select policies are much easier to acquire. To qualify for this type of policy, you cannot use tobacco for 12 months and you need to be in good health. Your cholesterol levels much be below 300. And, your blood pressure cannot exceed 140/90.
- Standard – Finally, there are standard policies. To acquire this type of policy, you must not have used tobacco within the past year. Your health must be good and your cholesterol should be below 300. Your blood pressure levels need to be below 140/90.
Ultimately, you can minimize your insurance premiums by improving your health and not using tobacco.
When it comes down to it, life insurance can be expensive. Nevertheless, it will pay off in the long run. You do not want your family to face too many burdens are your death. You can minimize the burden by acquiring life insurance. With life insurance, you can sleep soundly knowing that your family will be cared for once you’ve passed. And, you can guarantee that they’ll be able to give you a proper funeral and burial. With that being said, all Canadians should strongly consider getting life insurance. It is a good idea to get in touch with Sim Gakhar to find out more about your insurance options.
Get in touch
I am always a call away. If you are looking into life insurance coverage for the very first time or would like to discuss your existing policies, I would be glad to be your Markham life insurance advisor.
My contact information can be found here.