How to Accurately Calculate Life Insurance Costs

Carrie Smith | Life Insurance | 1 Dec, 2014 | No Comments

life insurance calculator
Do you know if your life insurance premiums are accurate? How much does life insurance really cost?

There are a few different things that factor into this figure, with your age and health being one of the main ones. It also depends on how large of a benefit you want paid out upon your death.

Let’s dive into how to accurately calculate what life insurance will cost you, so you can be sure you’re covered, without paying too much.

Know Which Factors Affect You

Finding the best life insurance policy, that will completely  cover your needs and not bust your budget, is not impossible to find. You do, however, need to understand the most common factors that will affect how much your policy premiums will be.

  1. Age: This is one of the most important factors to determining how costly or inexpensive a life insurance quote will be. Generally speaking, the younger you are the lower your rate will be, which means the older you become the higher it will cost. This is why many experts suggest you buy a policy sooner than later.

  2. Health: Secondly, your medical records and current health state will have a big impact on your life insurance premiums. If you have a history of chronic disease, or currently have other health problems, this will be factored in and likely result in higher rates. For this reason, individuals who are in good health will likely receive lower rates.

  3. Family History: In addition to your personal medical history, any history of serious illness or hereditary problems within your family will have an affect on how much your premiums are. A few other health factors include, obesity, alcoholism, smoking, and high blood pressure.

  4. Occupation: If your job is risky to your health, or if you work in dangerous situations, this could bump up your life insurance costs. For example; a race car driver will have a much higher risk of accidental death than a cubicle worker.

  5. Gender: Whether we like it or not, our gender does say something about our life expectancy. As a general rule, women tend to outlive men and therefore will usually have a lower life insurance rate compared to their spouse.

  6. Death Benefit: The higher the death benefit you choose, and the longer the term of the policy, will determine what rate you pay. The longer the term, the lower your monthly premium will be, and the more money you want paid out upon your death, the higher rate you’ll be charged.

  7. Policy Type: Term life insurance will always costs less than a cash-value policy. Depending on your choice, and your needs, each plan will require a different payment amount. Term life insurance doesn’t come with a cash-value payout so the costs are usually much lower. 

Once you understand your personal details, and preferences, you can move on to getting a more accurate quote of what life insurance will cost you.

Use an Online Calculator

The internet has dramatically changed how you can go about getting a quote for life insurance. In just a few minutes, you’ll be able to get a pretty accurate estimate.

Simply use our life insurance calculator to compare the lowest rates and you might even consider obtaining a few quotes from the larger insurers like State Farm, Famers, Allstate or American Family Insurance to ensure you’re getting the best deal possible. Comparing quotes from multiple companies will ensure you make an informed decision that’s best for your family. is another website that provides 3 essential calculators to ensure you are well prepared to understand the ins and outs of life insurance. Whether you want to determine how much coverage you should buy, your disability needs or are simply interested in calculating the value of human life, can provide some insightful information.

Of course, we highly recommend using our online term life insurance calculator, which doesn’t require any personal information to get started. It comes with a 30-day guarantee and is totally free.

Break Down the Yearly Premium

Once you receive a life insurance quote, based on your specific information and health factors, you can determine what it will cost on a daily or monthly basis. Of course you want to have the best coverage possible, but not overpay for it.

A good way to do this is break down the yearly premium into smaller chunks, and see if the insurance company will bill you on a monthly payment schedule. This smaller figure will make it a lot easier to know that you and your family are covered in the event of a tragedy or health disaster.

Paying $0.80 a day for life insurance is well worth the cost if you can have peace of mind knowing your family will be taken care of when you’re gone. Use these steps outlined here to find the best deal, and protect your future.


Carrie Smith (@carefulcents) is a freelance writer and editor who recently quit her full-time accounting job to pursue entrepreneurship and blogging.

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