1. Peggy MacePRO
    President and Senior Agent, Outlook Life, Most of the U.S.
    The amount that someone should be paying for life insurance depends on a multitude of factors. Some of those factors are:

    1) The length of the policy. Generally speaking, the longer your premium is locked in, the higher your term life insurance premium will be. Also, permanent policies usually cost more than term policies. However, getting a new policy every 10 years can end up costing more than locking in one policy for 30+ years. So you have to look at the big picture and the purpose of your life insurance in order to determine which is more cost effective for you.

    2) Your age. Premiums go up with age.

    3) Your health and other risk factors. Having a health condition, family history of early heart disease, dangerous hobbies, and other risk factors can all affect the price of your life insurance.

    4) The type of policy you get. If you want to build up cash value in your policy (such as Whole Life or Indexed Universal Life) it will cost more than a Term policy that has no cash value. However, even policies of exactly the same type will vary in price depending on the carrier you buy them from or whether or not you get an exam (generally, but not always, No Exam policies cost more than those requiring full medical underwriting). It is important to shop with an ethical broker who can find you the lowest price but also the type of policy that works best for your needs.

    5) Your financial situation. Persons with higher incomes and estate values may want to spend more on their life insurance coverage than those struggling to have a good quality of life on a low income. Insurance calculators can help you determine how much insurance you need, which will in turn help you arrive at an affordable price
    Answered on April 19, 2013
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