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Stuck inside your home indefinitely with your spouse? Now is a great time to apply for life insurance. While your spouse may be starting to get on your last nerve, you love them anyway. You rely on one another for not only companionship, but are likely financially dependent on each other. Let’s discuss working from home and social distancing. 

Term life insurance is affordable and customizable. It’s designed to provide income protection during your prime earning years. If you die unexpectedly while your life insurance policy is active (a.k.a. during the term) the life insurance company pays a death benefit. Families use this benefit to replace the income a spouse once provided. It pays the mortgage, keeps the electricity on, buys groceries, anything and everything a salary once helped pay for.

» Compare term life insurance quotes: Term life insurance quotes

Who needs life insurance?

Both partners in a relationship need life insurance. Even if you are a stay-at-home parent and don’t work outside of the home (even when we’re not practicing social distancing) a term life insurance policy is beneficial. A stay-at-home parent does an assortment of necessary things a family requires every single day. In fact, I’m sure working parents who are currently required to work-from-home are realizing just how much a stay-at-home parent does.

Most people need some life insurance. If you have children, you definitely need life insurance—and probably more than what your employer’s group life insurance coverage provides.

Term life insurance is much more affordable than people think. On average, Americans over-estimate the cost of life insurance by three times.

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How much does life insurance cost for couples? Are there discounts?

There are no coupons or promo codes in the life insurance industry. You and your spouse both should have individual life insurance policies. Even if you buy them at the same time or from the same insurance company, you won’t get a discount.

However, there is good news. Term life insurance is much more affordable than people think. On average, Americans over-estimate the cost of life insurance by three times.

Even if you aren’t in stellar health, term life insurance can be adjusted to fit in most budgets. You can adjust how long coverage lasts (typical term lengths range from 10-40 years). You can also adjust how much coverage you have starting as low as $50,000 and going into the millions. If you are in great health, I bet you’ll be surprised at how little life insurance costs.

» Find out how much life insurance you need: Life insurance needs calculator

How is the cost of life insurance determined?

The cost of a life insurance policy is determined by the individual applicant. Life insurance companies base premiums on the risk of the applicant. If you’re risky to insure, in other words your chances of dying as the result of a health condition or lifestyle factor are higher than the average person, you will pay higher premiums. For example, someone with heart disease will pay more than someone without heart disease. And someone with a perfect driving record will pay less than someone with a DWI history.

In addition, someone who smokes cigarettes automatically pays more than someone who doesn’t. Tobacco users have their own classification of risk.

After you apply for life insurance the insurance company categorizes you into a “risk class”. Below are the standard risk classes. If you have a complicated health history, you may be “table rated”. This means that your risk factors fall outside of the standard risk classes and require special pricing to insure.

Risk Classes
For Non-Tobacco UsersFor Tobacco Users
Preferred PlusPreferred Tobacco
Preferred
Standard PlusStandard Tobacco
Standard
Table Ratings (Substandard)

Using the same layout as the table above, I’ll provide examples of term life insurance pricing.

$250,000 20-Year Term Life Insurance Policy for 35-Year-Old Male
Preferred Plus = $13.54Preferred Tobacco = $47.30
Preferred = $16.54
Standard Plus = $20.52Standard Tobacco = $65.01
Standard = $24.02

$250,000 20-Year Term Life Insurance Policy for 35-Year-Old Female
Preferred Plus = $11.82Preferred Tobacco = $39.10
Preferred = $14.58
Standard Plus = $17.97Standard Tobacco = $52.90
Standard = $20.08

Most table rating systems take a normal risk class, like Standard, and increase the regular premium payments by 25% for every step you go down the table.

For example, using the numbers from the table above, if a man is given a rating of Table B, the insurance company requires an additional 50% on top of the standard cost, making his policy $36.03 per month instead (24.02+50%). If he’s rated at Table C, he would pay Standard prices plus 75%, so $42.04 per month total.

The younger you are, on average, the cheaper your life insurance premiums are. Why is this? Aside from the obvious fact that as you age, you get a year closer to dying, as you age, the chances of developing a health condition increase.

Also, as you may have noticed, women pay less for life insurance on average. This is because statistically women live longer than men. Women, overall, are more health conscious and more willing to see a doctor when needed. Women also are less prone to risky behavior compared to men.

Once a term life insurance policy is in place, the premiums are fixed the entire term. If the 35-year-old male from the table above buys a $250,000 30-year term policy with premiums of $20.52 each month, he will only pay $20.52 monthly the next 30 years. If he dies at any time within those 30 years the premiums are no longer required and his beneficiaries receive $250,000.

You never know what curveball life is going to throw at you, such as working from home. You and your partner can apply for life insurance easily here through Quotacy. You’ll be assigned a dedicated agent to guide you through the process of getting approval.

The first step your agent will do is review your individual applications and make sure you’re matched with the best life insurance company for your unique situation. You see, not all life insurance companies evaluate risk factors in the same light. For example, one insurance company may be more lenient with a depression diagnosis over another company. After applying online, your agent may recommend switching to a different insurance company with better odds of approval, but the choice is completely up to you.

Quotacy is a life insurance broker and we operate independently from any insurance company. Quotacy is here as your advocate to help you get the best life insurance coverage to protect you and your family.

Note: Life insurance quotes used in this article are accurate as of March 9, 2020. These are only estimates and your life insurance costs may be higher or lower.

 

About the writer

Headshot of Natasha Cornelius, a life insurance writer, for Quotacy, Inc.

Natasha Cornelius

Marketing Content Manager

Natasha is a writer and content editor at Quotacy. She is also co-host of Quotacy’s YouTube series. She can't get enough of life insurance and outside of work is also working toward her Chartered Life Underwriter designation. Connect with her on LinkedIn.