The actual policy amount of life insurance plays a very important role in the premium that you may have to pay. However, the premium is not only dependent on the policy amount; various other components can bring about a huge change in the premium amount. One of the most common policy amounts that people prefer opting for is definitely 100,000. If you too are searching for a life insurance policy for 100,000; you have landed at the right place for sure. Below mentioned key points will help you understand life insurance policies in a better way and help you make the best decision possible.
How Much Amount Of Life Insurance Do You Actually Need?
While you plan to buy a 100,000 life insurance policy, the most important factor that you need to focus on is the insurance amount. As per experts, it is highly recommended to keep the face amount of your life insurance at least 10-15 times your annual income. The price may go up or down based on various other factors, some of which are as listed below.
- Debt: If you have been carrying any kind of debt, let it be a home loan or a personal loan, it is very important to factor in the same while picking the insurance amount. You certainly do not want your loved ones to be carrying your debt after you.
- Your Income: If you have been earning 40,000 annually, you will need your life insurance policy to cover at least 10 times your annual income, i.e., 400,000. However, apart from that, you would also need to factor in the inflation. Therefore, you need a life insurance policy of at least 500,000 for your loved ones to be coved financially after you.
- Ensuring other family members: It is only sensible to cover the members in the life insurance who have not been devoted financially to the family. The death of a child, however, heart-wrenching that might be; would not affect the family income.
What Is The Average Cost Of A 100,000 Life Insurance Policy?
If you have already finalized to buy a 100,000 life insurance policy, you certainly need to fetch out the premiums offered by the best insurance companies. However, with an increase in age, the total premium that would need to be paid regularly would also go higher. Another factor that may impact your life insurance premium would be the tenure of the life insurance. For a 30-year-old person, the average premium that would need to be paid for a tenure of 20 years would be 12.59. However, the same amount would go up to 8.31 for a 60-year-old person.
Another important factor that may impact your life insurance policy premium would be your health condition and smoking habits. Smokers and people in a bad health conditions are more likely to claim their insurance policy, thus, they have to pay a higher premium for the same coverage amount as compared to a healthy policyholder.
Based on the above-mentioned information, it would certainly become easier for you to narrow down a great insurance policy that would cover your loved ones financially even if you end up losing your life due to any kind of unfavourable situation.