Half Million Dollar Life Insurance

You may be thinking that on the birth of a child, most parents would be intent on taking out a life insurance policy. However, statistics show that this is indeed not the case.

A recent survey conducted by MetLife found that most consumer life insurance policies are taken out after a wedding rather than the birth of a child. The survey uncovered that 50 percent of working men and women who do not have dependent children and who are not married possess life insurance. For those who are married couples, 72 percent have life insurance, while for those married couples with young dependents, 75 percent have a life insurance coverage.

The question therefore has to be asked – why is it that more parents are not intent on taking out a life insurance policy? There are a number of potential obstacles to doing so, namely:

  • Cost
  • Logistical problems (health check-ups)
  • Future considerations (thinking about one’s own death is not generally high on the agenda)

The fact remains that life insurance, or even insurance in general, is more for the ‘what-if’ times, that the vast majority of people don’t wish to consider.

 

Half-Million Dollar life insurance policy being signedThere are of course other considerations to be made for parents. On their own death, they should ensure that their families are financially protected. The Agriculture Department estimated that the cost of raising a single child up to the age of 18 is estimated to be $234,900. Obviously, parents need to find a way to cover the cost of feeding, clothing, and educating their children, should they themselves be absent.

But even those parents who do have life ins may very well be under-insured. MetLife discovered that the average workers’ life insurance will cover no more than three times the household income annually.

Financial experts traditionally recommend that individuals take out at the very least seven times their annual income. Nevertheless, each family’s needs does tend to vary. Therefore, a more accurate account might be to calculate how much is necessary to replace the main breadwinner’s income, or what would the costs be to cover such things as college tuition.

Best 20 year term rates on a $500K policy for men, 40 to 65 years old.

The premiums shown in the table below are for men in good health and non-smoking.

Insured $500,000
40 year old man $30.15
45 year old man $51.22
50 year old man $77.99
55 year old male $124.46
60 year old male $212.15
65 year old male $403.88

04/27/2021 - These insurance premiums are just an estimate. Your policy costs could be different.

Best 10 year term life insurance rates for a $500,000 policy for women, sixty five to seventy five years of age.

The premiums shown in the table below are for women in good health and non-smoker.

Insured $500,000
65 year old woman $149.35
66 year old woman $163.75
67 year old woman $178.43
68 year old woman $195.65
69 year old woman $222.70
70 year old woman $249.75
71 year old female $275.85
72 year old female $308.70
73 year old female $354.85
74 year old female $400.45
75 year old female $455.90

04/27/2021 - These insurance premiums are just an estimate. Your average policy costs could be different.

Further MetLife survey findings include:

  • Only two in five parents feel confident that they are making wise financial decisions with regards to their family.
  • Three in four employers provide a life insurance policy to their employees. Nevertheless, many employees are not aware that if they move to another job, they will lose that coverage. Therefore, they should additionally have some form of outside coverage.
  • The needs of life insurance tends to grow with time. Family sizes increase, for example, and as such, life insurance coverage should increase accordingly.

So, other than the consideration for diaper and kindergarten costs, parents who are looking forward to having their first or next child should add a further item to their to-do list: either taking out, or adding to a life insurance policy. Fact of the matter is that their kids may well depend on it one day.