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Getting a $100,000 life insurance policy
A popular choice for those who have healthy savings and retirement accounts.
If you have people who are financially dependant on you, you may want to think about life insurance. When you die, your policy kicks in to help them maintain the lifestyle they’ve grown accustomed to.
A $100,000 policy is popular among those who have healthy savings and retirement accounts, and want to use life insurance to supplement that. It’s also common for business owners taking out key employee insurance and those who are hoping to secure a loan.
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How much does a $100,000 life insurance policy cost?
Life insurance is personalized to the individual. The rate you’re offered is based on gender, age, health, lifestyle, occupation and hobbies, as well as the length of your policy.
However, a $100,000 policy is well within reach for most people.
Let’s say you’re a 30-year-old nonsmoking man living in Ohio. A 20-year term life policy with $100,000 coverage could cost around $9.52 a month with Pacific Life. If you smoke, the rate could climb to $25.83 a month.
For that same policy, a 30-year-old nonsmoking woman living in Ohio could be charged $8.17 a month with Transamerica. A smoker might pay $17.80 a month.
As always, younger, healthier applicants score the best life insurance rates, so apply as soon as you can to lock in the lowest premium.
*Based on sample rates from Policygenius, December 2019
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Is a $100,000 life insurance policy right for me?
To figure out if $100,000 is the right amount of coverage for you, think about your income, financial obligations and why you’re getting life insurance.
The general rule of thumb is to purchase coverage that’s 5 to 10 times your annual salary. So, if you’re a low-income worker or someone who’s still climbing the career ladder, a $100,000 policy might be appropriate. At the end of the day, if you’ve determined a need for life insurance, some is better than none — and you can always ladder policies later on. Because a $100,000 policy is inexpensive, it’s a monthly expense that you should be able to comfortably pay.
Affordability aside, consider your reasons for taking out a policy. Is it simply to cover your funeral costs? Pay off your debt? Protect your business? Or do you want to leave your family the funds they need to maintain their lifestyle?
Typically, those who sign up for $100,000 of coverage have healthy savings accounts, no dependents, little debt and few liabilities. For instance, it’s a popular option for seniors who’ve paid off their debt and have assets or money stashed in savings or retirement accounts. Their children are grown and well established in their own careers, and simply want life insurance to cover end-of-life expenses so their families aren’t saddled with that financial burden. They may also want to leave a small inheritance for their grandkids.
It’s also common for business owners to take out $100,000 of coverage for key employees or partners. That way, if those valuable people die, the company won’t be strapped for cash while it finds replacements.
If you’ve done the math and realize that your financial responsibilities add up to over $100,000, you may want to look at higher coverage.
Can I get a $100,000 life insurance policy?
To determine if you’re eligible for a $100,000 policy, underwriters will look at your age, health and income.
When it comes to life insurance, young, healthy applicants are in the best position. This is because insurance companies use your age, health and family history to calculate your risk of dying during the term. The lower that risk, the less chance the insurer will have to pay out your death benefit.
Your life insurance provider will also assess your income. The reason is simple: It needs to confirm that you can afford to pay your premiums, and for a $100,000 policy, the requirements aren’t too steep. In most cases, you’ll just need to prove that you’re earning $10,000 a year or more.
Can I get $100,000 coverage without a medical exam?
Yes, most likely.
Without a medical exam, insurers can’t get a clear picture of your health and family history. It’s a riskier move, so no-exam policies are more expensive. There are two products on the market that don’t require a medical exam: Simplified issue and guaranteed issue life insurance.
Most insurers cap their coverage at $250,000, so finding a no-exam policy with $100,000 of coverage should be pretty easy. Unless you have a serious health condition, like AIDS, or a family history of heart disease, diabetes or cancer, you should be eligible for coverage. Along with checking your pharmacy and Medical Information Bureau records, insurers tend to look at your DMV history, so keep in mind that any major violations could affect their decision.
Typically, no-exam policies are approved within a week, though some providers can approve your coverage on the same day.
While traditional policies offer better value for your money, no-exam options are ideal for people who need coverage fast — say, to secure a business loan or fulfill a court order.
Companies that offer $100,000 coverage
Bottom line
Once you’ve decided you need life insurance, the next step is working out how much coverage to buy. Think about your financial obligations now and in the future, and why you’re buying your policy. If you’re simply purchasing life insurance to boost your business or help your family tie up loose ends, or your financial responsibilities come to $100,000, you may be the right candidate.
Frequently asked questions
Ask an Expert
i know a nonsmoker male 67 yrs fair health he pays $140 month for $100,000 life insurance is this high or in range
Hi Ken,
Thank you for leaving a question.
The coverage on life insurance depends on a couple of factors from Health to income to lifestyle. These are all taken into consideration when assessing the coverage for an individual. You may need to reach out to a lender to know the specifics as to how this is computed. Hope this helps!
Cheers,
Reggie