The REAL Cost Of Life Insurance: A Story From The Trenches

Back several years ago while working in financial services I ran into a couple that was interested in buying life insurance.  They were both in their mid 30’s, had a few kids, and a pile of debt.  Because of this they decided that they should have some life insurance just in case the unthinkable happened.

So I drew up a few illustrations for them and found a couple of 30 year term policies with $100,000 in coverage for them that ran less than $20 each a month.  I figured based on their current situation that this was all they would be able to afford.

When the time came for them to make a decision they decide the cost of life insurance was to much for them and that they just couldn’t afford it right now.  I explained to them that they didn’t want to wait on something like this, but against my better judgement they decided not to do it.

cost-of-life-insurance

A year later I got the news that she a severe stroke.  I couldn’t believe it, if I had only tried a bit harder they could have had the coverage.  Thankfully though she didn’t die but the chances of her getting life insurace are slim to none unless she can qualify for high risk life insurance.

The Cost Of Waiting

Every time I hear someone say, I don’t need life insurance because it’s to expensive, I share that story with them and tell them, is it really worth the risk of waiting?

Truth is it isn’t worth waiting, in fact the younger you buy a life insurance policy the cheaper it can be.  Below is a 30 year term with a $100,000 worth of coverage for a 20 year old male.

20_years_old

As you can tell the cost for a 20 year old is very cheap, starting out at around $14 a month.  However look what happens when you wait 10 years.

30_years_old

By waiting till age 30 you can still get a policy for around $15 a month providing you in good health and don’t smoke. However what if you wait until your 40?

40_years_old1

At 40 we can still get a decent price on a life insurance starting at around $19 a month for a $100,000 in covergage.  Now let’s see what happens when we wait till we’re 50.

50_years_old1

At 50 things begin to change we’re at that point in are lives were we need to start thinking about these things more.  At 50 the cost starts to go up dramaticly to around $41 a month starting out.  Now let’s see what happens if we wait till 60.

60_years_old

At 60 a 30 year term policy jumps to $100 a month.  That’s an increase of $60 over the last 10 years.  Now lets see what would happen if we wait till 70.

70_years_old

At the age of 70 they wouldn’t even quote for a 30 year term with $100,000 in coverage, however I could get a 10 year term though and the cost went up to $100 a month.  Do I dare see what 80 looks like?

80_years_old

At the age of 80 the average cost of life insurance would triple to around $340 a month.  Now you might be saying who would by life insurace at 80 years old and I can’t tell you how many times I’ve gotten comments on this website and emails back from people looking for life insurance for elderly people.

Final Thoughts…

Obviously, it’s easy to see the moral of this story, buy early and avoid the high cost of life insurance.  By not buying now your age and health may get the better of you,  so don’t delay.

Do you have life insurance yet?  Share your comments or questions below.

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