Posted on January 23, 2016
It may surprise you to know that, as prices for many everyday items continue to increase, the price of term life insurance has generally decreased over the last 20 years. Just look at this chart for more details.
|July 1994 Price||July 2014 Price||% Change|
|Term Life Insurance Policy||$995 per year*||$355 per year**||-64%|
Source: U.S. Department of Labor
Surprised? Most people are. According to a recent study by LIMRA, a life insurance industry organization, consumers believe a life insurance policy, including term insurance, costs nearly three times what it actually does.
How much do you think life insurance costs? Let’s take a little quiz.
Jim is a 30-year-old male in excellent health (Super Preferred rating). He wants a 10-year term insurance policy with a $500,000 death benefit. How much will Jim have to pay each month for his coverage?
Carol just turned 50 and is in good health (Select Nonsmoker rating). She wants a 20-year term insurance policy with a $1 million death benefit. How much will Carol have to pay monthly for her policy?
Avery is a 45-year-old male smoker who is in good health (Select Smoker rating). Avery has a high net income, significant assets and is shopping for a 20-year term policy with a $4 million death benefit. How much will Avery have to pay monthly for his policy?
Question 1: D, $14
Question 2: A, $173
Question 3: A, $1,568
When it feels as if everything costs more these days, think about term life insurance. It provides protection for you and your family and is more affordable now than 20 years ago.
For more information, contact your Ohio National Financial Professional.
* What Is “Affordable Life Insurance?” National Underwriter Life and Health Magazine, March 1, 2010.
**Term rate based on Ohio National’s Term Plus, 40-year-old male, non-smoker, best class, effective June 1, 2015. Premiums for issued policies will be different based on age, sex, face amount and underwriting classification.
Term life insurance is issued by Ohio National Life Assurance Corporation on policy form 07-TR-1 and state variations. Term products are convertible to the end of the level term period or to the policy anniversary date nearest the insured’s 70th birthday, whichever occurs first. Conversion options vary by term product. Product, product features and rider availability vary by state. Guarantees are based on the claims-paying ability of the issuer. Issuer is not licensed to conduct business and products are not available in AK, HI and NY.
In the remaining question, premiums shown are for Term 10 Plus and Term 20 plus, a renewable term life insurance policy that guarantees the premium to remain level for 10 or 20 years from the Policy Date. The premiums quoted are based on the age of the insured or nearest birthday and specified underwriting classification and are subject to change without notice. Premiums for issued policies may be different than the premiums shown based upon actual underwriting classification.
Generally, in the absence of fraud, after an amount of insurance has been in effect for two years during the insured’s lifetime, we cannot contest the amount due to a false statement made in the application. In the event of death during the first two policy years by suicide or self-destruction while insane, only the premiums paid will be returned as death proceeds. FlexTerm Series IX policies (Form 07-TR-1 and any state variations) are underwritten and issued by Ohio National Life Assurance Corporation, Cincinnati, Ohio. Guarantees are based upon the claims-paying ability of the issuer. Product, product features and rider availability vary by state.