What is the monthly insurance cost for a single healthy man that is 25?

Answer 1

$12 per month for $100,000 of term life insurance is a ballpark figure (if you are asking about life insurance). The exact figure would depend on your smoking habits, preexisting conditions, the amount of insurance you get, whether you pay a year in advance, the company you buy from and maybe other things.

But there are more unstated variables. First, does the question pertain to health insurance, life insurance, disability insurance, or all types?

Once that determination is made, there will be differences depending upon whether the policy is an individual one or a group policy. It is generally true that group policies are less costly than individual policies, but they also provide less flexibility in the coverage available.

Policy limits are also a factor in cost. With life insurance, one buys a face amount of insurance (life insurance is classified as a "valued" policy for that reason), and the premium varies with the amount purchased.

Additionally, one has to choose between term life insurance and permanent (whole-life) insurance, which has a big bearing on cost. With term insurance, the insured is essentially "renting" the protection, in the sense that he must die when the policy is in force (before the policy expires) for the beneficiaries to collect. Term policies are generally written for a stated duration of time, and if death does not occur within that time, nothing is paid nor is there any value accumulated.

In contrast, whole life coverage accumulates cash value (often called "savings") in the sense that a part of every premium payment goes toward the cash value which accumulates over time--although very slowly in the early years. It is called "permanent insurance" because there may come a point in time when, after premiums have been paid for quite a while, it becomes fully paid-up and no further premiums have to be paid. The cash value can be borrowed (usually at an advantageous rate), but if not repaid, the policy loan, plus interest, is deducted from the death benefit. Whole life insurance is more expensive than term, but in a sense, it contains an element of forced savings.

Term rates are quite competitive, especially for people with no health concerns. If you are raising a family, there is a lot to recommend loading up on it while you are young and when your family would need to replace your earnings were to to die prematurely.

There are many permutations of whole life too, and ideally, you should have some of it in the mix. As to both term and whole life, you are well advised to spend an extra few dollars per month as additional premium and buy a disability waiver add-on. It will pay the premium on the policy(ies) if you become disabled (according to its definition of disability) so that you do not lose the insurance if you cannot work.

Disability insurance is another form of insurance that you should seriously consider. It replaces a portion of your earnings in the event of disability. It is medically underwritten, meaning that your health in part determines premium. Therefore, if you are in good health now, buy it now because you cannot predict what will happen later. The amount you buy will be guided by your current earnings, so you should periodically revisit the amount of benefits as your earnings increase.

Your job will probably provide a limited amount of short-term disability insurance (covering 3-6 months or so), and if it does, your purchase of private long term disability should be coordinated with it so that benefits do not overlap. An option that you will have in selecting a disability policy will be "own occupation" or "any occupation". With the first kind, you will be considered disabled if you are unable to perform the major duties of the occupation that you had when you became disabled. With the other type, you will be assessed as to whether you are able to perform the material duties of any occupation for which you are suited by education or experience. The "any occupation" type is usually less costly, but you have to be more severely disabled to collect.