Understanding the Average Life Insurance Policy

Life insurance comes in many forms, and you can find premiums in a variety of ranges—some as little as $45 per month. As you explore different policies like whole life insurance, term life insurance, permanent life insurance and more, you may start to wonder which one suits you best based on an average life insurance policy.

Unfortunately, there is no one-size-fits-all insurance package and premium that will work for everyone. This is because everyone’s life is different, each family has unique needs, and every person wants something special for their beneficiaries. What seems most beneficial to one person may not be to another.

What is clear is that more and more Americans are turning to term and whole life insurance policies because of their attractive pricing and level premiums that never increase. Look at our comparisons of whole life insurance and term life insurance below to see if one of these life insurance policy forms can help you get the coverage you’re looking for.

Popular Whole and Term Life Insurance

If you are a younger applicant, term life insurance may come to you at a highly attractive rate if you are willing to sacrifice certain benefits, such as cash value, that you would get from another policy type. And, if you are an older applicant, whole life insurance policies may be more helpful since they will require no medical exam.

For those who are of greater age, not taking a medical exam helps avoid the tedious element of application (and application denial on the basis of health concerns), but it also means that you’ll pay a little more on premiums than with term coverage. As an advantage, however, a whole policy holds cash value which grows while you’re alive helping you to use it as a financial tool.

On the other side, a younger applicant can command the lowest rates with term life insurance that still gives a healthy amount of death benefits to cover early life expenses, responsibilities, and debts. While they don’t hold cash value and will expire at the end of the 15-, 20-, 30-, or another yearly term you select, they are guaranteed to pay within that time period. Your rates will also never rise.

Term life makes sense for those looking for coverage while they are still earning in the workforce and want a lower premium with good death benefits, but whole can also work—though it’s more aligned with the needs of usually older applicants looking to forego an official, medical exam and create cash value through premium payments.

Whole vs. Term Life Insurance Premium Costs

Life insurance is a worthy investment for those who know the value of a financial safety net for those they love. It’s crucial to understand how your payments and policies will work toward that goal of greater financial security. One never wants their policy to lapse, losing the right to critical benefits that could help their loved ones survive an immense misfortune.

Of course, the details of each policy and premium are up to you and the specifics of your application and goals. You should always choose the one you believe you can comfortably handle so that you always know life insurance will be there in the worst-case scenario.

But, in addition to budgets, you’ll want to consider the details of your current age, relative health, family profile, and lifestyle choices. These will tell you how much you might need in coverage, and they might shine a light on how much you should expect to pay for the peace of mind of insurance coverage.

The calculation may be slightly different for term and whole life insurance decisions. With term-based policies, you’ll likely be looking to cover your family securely for a good price with death benefits alone—if they’ll lose your income and major support once you’re gone.

But, with whole insurance as an older applicant, you may find that few rely on you for support (if at all) and you can concentrate on paying off debts and building wealth. These can also make sense for those who want extra benefits for their loved ones with a policy later in life that doesn’t require an exam.

As a general pattern then, you’ll see that while term and whole life insurance policies may not change premium rates over time, whole will turn out to be more expensive, especially for older applicants.

Pick Your Life Insurance Policy with Sproutt

You’ve seen that where you are in life and the budget you have for life insurance will determine what the average policy is for you. But, whether you are older or younger, interested in term or whole, you can choose affordable policies with strong benefits using Sproutt, an online broker with insurance industry insight and easy-to-use tools for shoppers.