Life Insurance vs. Cost of Living: Why It Pays to Consider This Difficult Compromise

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Life Insurance vs. Cost of Living: Why It Pays to Consider This Difficult Compromise on avanteinsurance.com

When the cost of living is high, few want to think of the cost of dying. However, life insurance can be far more positive than an unwelcome reminder.

Data from the Census Bureau and the U.S. Bureau of Economic Analysis rated Florida among the lowest states for “real” pay; a state-by-state quantifier of how far a paycheck really stretches. Floridians manage an effective median income of $49, 674, but that figure can vary greatly within the state due to factors like personal taxes and Social Security.

Sixty-six million Americans who claim Social and Supplementary Security Income received a 2% increase on those payments in 2018, the largest hike in five years. Many families still struggle to make ends meet, however. It’s easy to see why life insurance can seem costlier than comforting.

In fact, the presumed expense is the number one reason 27 million Americans pass on life insurance, followed by finding the application process too confusing or too slow. Let’s look at why taking out a life insurance policy is a rewarding move.

Is there such a thing as an average cost for life insurance?

This is the most common question for anyone wanting to compare the price to their cost of living. The right answer is yes and no. The price of premiums fluctuates for all types of insurance; for life coverage, more factors affect it than most. These are:

•  How old you are (premiums are more expensive the older you are)

•  Current lifestyle/health conditions (smokers can pay up to 200% more for their policy)

•  Family history which may affect your health in future

•  Your gender (policies are typically more expensive for males)

•  Your driving record

•  What type of life insurance you select

•  How long you need it for

For a general figure, let’s imagine a male and female in their mid-30s with a term life insurance policy of 20 years at $1 million in coverage. Assuming they’re in good physical shape, the man would be paying around $40 a month for his life insurance, while the woman would pay closer to $35. There are cheaper coverage amounts, but we chose one million to allow for the comparison below.

Take a close look at your current expenses

Everyone’s life demands are unique – which is the number one reason to speak to a qualified insurance professional. We understand how many people are running to catch up with difficult financial situations, but we can put things into perspective by looking at some common expenses.

Take the price of a cup of coffee. Americans in the South Atlantic states pay on average $2.67 for a cup. If a person buys one cup every day for work, Monday to Friday, they’re spending $53.40 per month. Floridians pay an average of $6.30 for a pack of cigarettes; $50.40 monthly at a rate of two packs a week.

A mid-range bottle of wine averages at $12, or $48 per month at a bottle a week. Of course, not everyone drinks coffee or wine or smokes. Our purpose here is to show where money may be going, and why a momentary satisfaction or habit could be robbing you of a life insurance policy.

Risks of not have life insurance

If you’re a single person with no family ties or dependents and plan to stay that way forever, you’re not risking much. The majority, however, do have spouses, children, parents, and other dependents who rely on them for financial support. If you’re one of that majority, then your life insurance will help to fill the void left by your income.

Dependents can also become wholly responsible for any debt or unresolved financial matters. The average American in the 35-44 age bracket is $133,100 in debt. While this average figure does decrease with age, it still amounts to tens of thousands of dollars.

A life insurance plan can also provide for more positive things, with a typical example being a child’s college tuition. In fact, ensuring the education of a young dependent is one of the primary reasons many life insurance policyholders are motivated.

The right frame of mind for life insurance

There’s a proper perspective to have with all insurance, especially life. If you don’t want to think of anything bad happening to yourself, think of life insurance as protecting your loved ones from harm. If you’re able to, then you should consider looking at a policy today.

If that means reducing your expenditure on certain habits, you may even make yourself a little healthier into the bargain. A healthier lifestyle means better life insurance premiums, after all! Whether we admit or not, we’re all concerned about what might happen in the future. Ultimately, it’s better to worry and be covered than to be without a policy.

A useful resource

Our health and lives are everything, and they needn’t suffer for fear or expense. This quick list of free health benefits you may be missing out on could help you save some money; a saving that could go toward checking out a life insurance policy. Whatever questions you have about the matter, we’re here and happy to help.

Avante Insurance is a South Florida family-owned and operated agency providing an array of services to meet customer’s individual needs. If you need insurance advice, you can call us at 305-648-7070 to request an insurance quote or contact us with questions or comments.