Death, on the other hand, exacts both an emotional and financial toll on a family. That’s why financial advisers highly recommend that couples prepare for the unexpected through life insurance.
The issue may have taken on added importance during the COVID-19 pandemic, which has claimed nearly 1 million lives in the U.S. The evidence suggests that more people are considering adding the protection.
Research conducted by ConsumerAffairs found that 65% of respondents to a survey had both a will and a life insurance policy. Fifty-two percent said they created a will to avoid a financial crisis for their family — the most common motivation for doing so.
However, 38% of the sample of over 1,000 people said they don’t have life insurance because they can’t afford it.
More affordable than you think
In actuality, a life insurance policy can be very affordable depending on your age, your health, the amount of coverage, and the type.
The least expensive coverage is a “term” policy, meaning the coverage is only for a set term, usually 10 or 20 years. The cost is lower because the risk for the underwriter is lower. The odds of someone dying during that time period are fairly low.
Research conducted by LIMRA and Life Happens found that more than half of Americans believe a life insurance policy costs three times its actual rate, with that belief especially strong among young people. According to Fidelity Life, a healthy 30-year-old woman can buy a 10-year, $100,000 term life insurance policy starting at $13 a month, about the cost of a streaming subscription.
Lots of options
Because so many companies now offer life insurance coverage, the competition has kept premium rates in line. Debbie, of Channahon, Ill., told us she found an affordable policy through Haven Life.
“I have never had an easier time purchasing life insurance,” Debbie wrote in a ConsumerAffairs review. “Usually it would take weeks and I would have to send documents and have multiple calls. I was able to secure life insurance in 30 minutes and it didn't cost me any more than other life insurance. Also, really liked how simple and easy the website was."
According to Fidelity Life, a number of important factors besides age and health will affect what you pay for life insurance. Women tend to pay less than men, and smokers pay quite a bit more than non-smokers.
High-risk jobs and hobbies will also result in higher rates, meaning life insurance typically costs more for first-responders and construction workers and less for accountants.