Average Life Insurance Payout in 2021 | See Chart

ethos life insurance review
ethos life insurance review

If you are a subscriber to any life insurance package, it is important you know what’s in it for you in the coming year. This article has been written to show you the average life insurance payout in 2021. Do follow closely for all the insights!

Life insurance is among the most important insurance policies everyone needs.  This is the case because it not only ensures that all of your final expenses are paid but also means that your insurance beneficiaries are taken care of.

Furthermore, it can come along with many other benefits while you still have breath in your nostrils.

In clear terms, finding a life insurance is not a hard nut to crack. To really help you find your way it is what this article aims to achieve.

So, all you have to do is to stick through to the end in order to learn more about life insurance costs and payouts, and lots more. Meanwhile, before we get in, here’s the table of contents for an overview of what to expect in this article.

What is Life Insurance?

A life insurance policy is a contract that someone has with an insurance provider. You are to make payments and in exchange for it, the insurance company will make available a lump-sum payment to your beneficiaries upon your passing.

What is a Life Insurance Payout?

A life insurance payout refers to the total amount of money received by a policyholder’s beneficiaries upon their death.

For the policyholder’s beneficiaries, he/she has to successfully claim on a valid life insurance policy. It is after this has been done successfully that the average life insurance payout is claimed.

If the life insurance policy includes terminal illness cover, the payout can be made directly to the policyholder on several occasions if he /she diagnosed as having less than 12 months to live.

Related Post: How Do Insurance Companies Make Money? | 2020 Full Business Model

Life Insurance Payout Rates

There’s variation in the life insurance payout rates and its dependent on the insurer, however, the average is 98.3%. This is speculation and the reality far exceed it.

What is the Average Life Insurance payout?

Average life insurance payout is a significant variation in the average life insurance payout which depends on the type of cover in place. In the lines to come, I’ll discuss with you more extensively.

When do life insurers payout?

A policymaker’s beneficiary can make life insurance claim as soon as someone passes away, the beneficiary has to provide a death certificate before the issuance of a payout.

Upon receipt of a successful claim, the payout will be made to the beneficiaries of the policy and payment will usually be received within 30 days.

In order for the claim to be valid, the following has to be in place.

  • Payments on the policy must be up to date
  • The policy must still be active (term-based)
  • All information made available for application must have been correct

It is to be noted that a payout cannot be made by the insurer to the policyholder directly if a diagnosis confirms that have a serious condition and have less than 12 months to live.

Who gets Life Insurance Payout?

On a general note, a life insurance payout is made to the following:

  • Your spouse
  • Your next of kin
  • The person named in your will
  • Named beneficiary in trust

To ensure that your life insurance payout is received by who you desire, the best avenue to get this done is by writing the policy in trust.

Writing the policy in trust allows you to specify someone (a trustee) to carry out your wishes after you’re no more, ensuring your loved ones receive the insurance payout. This is much like saying that you are an executor of a will.

If the person in question is married before his/her death, by default, the proceeds of your life insurance will automatically be paid to his/her spouse.

Related Post: 10 Life Insurance Companies that don’t require a Medical Exam in 2021

Term Life Insurance versus Whole Life Insurance

Term life insurance is an insurance plan that helps with the provision of financial protection over a duration of time such as 10, 15, or 20 years. When one has a traditional term life insurance plan, his/her monthly premium amount stays the same throughout the term.

While

Whole life insurance is a form of permanent life insurance that is designed for the provision of lifetime coverage to the owner. Since the coverage of this insurance lasts an entire lifetime and never expires, as expected, the premiums are much higher than term life insurance.

What is the Average Life Insurance Policy Payout?

Average life insurance is the amount you pay annually for your term or whole life insurance and this depends on several factors. These several factors can include health, lifestyle, and age.

The age at which one applies for term or whole life insurance helps in the determination of how much premium one is entitled to.

Let me take you through the average life insurance payout for various age groups.

Average Life Insurance Rates by Age and Gender

Average Life Insurance Rates for Men Aged 20

PlanTermAverage Premium Per Year
100,000 Term-life20-year plan$111 per year
100,000 Term- life30-year plan$147 per year
Whole life planWhole life$724 per year

Average Life Insurance Rates for Women Aged 20

PlanTermAverage Premium Per Year
100,000 Term-life20-year plan$264 per year
100,000 Term- life30-year plan$337 per year
Whole life planWhole life$622 per year

Average Life Insurance Rates for Men Aged 30

PlanTermAverage Premium Per Year
500,000 Term-life20-year plan$156 per year
500,000 Term- life30-year plan$240 per year
Whole life planWhole life$2,385 per year

Average Life Insurance Rates for Women Aged 30

PlanTermAverage Premium Per Year
500,000 Term-life20-year plan$208 per year
500,000 Term- life30-year plan$335 per year
Whole life planWhole life$4,142 per year

Average Life Insurance Rates for Men Aged 40

PlanTermAverage Premium Per Year
250,000 Term-life20-year plan$210 per year
250,000 Term- life30-year plan$384 per year
Whole life planWhole life$3,508 per year

Average Life Insurance Rates for Women Aged 40

PlanTermAverage Premium Per Year
250,000 Term-life20-year plan$185 per year
500,000 Term- life30-year plan$314 per year
Whole life planWhole life$3,008 per year

Average Life Insurance Rates for Aged Men 50

PlanTermAverage Premium Per Year
1,000,000 Term-life20-year plan$1,692 per year
1,000,000 Term- life30-year plan$3,301 per year
Whole life planWhole life$21,480 per year

Average Life Insurance Rates for Women Aged 50

PlanTermAverage Premium Per Year
1,000,000 Term-life20-year plan$1,233 per year
1,000,000 Term- life30-year plan$2,349 per year
Whole life planWhole life$17,760 per year

Average Life Insurance Rates for Men Aged 60

PlanTermAverage Premium Per Year
250,000 Term-life20-year plan$1,477 per year
500,000 Term- life20-year plan$2,793 per year
1,000,000 Term-life20-year plan$5,393 per year
250,000 Whole life planWhole life$8,783 per year

Average Life Insurance Rates for Women Aged 60

PlanTermAverage Premium Per Year
250,000 Term-life20-year plan$1,033 per year
500,000 Term- life20-year plan$1,911 per year
1,000,000 Term-life20-year plan$3,637 per year
250,000 Whole life planWhole life$7,293 per year

Bottom Line

In a nutshell, life insurance protects your loved ones financially after you die. According to research done in 2015, the average life insurance policy in the U.S. carried a face value of $160,000 of which some of them are unclaimed yet.

Keeping your loved ones informed about your life insurance packages will help them make full use of them. Life insurance benefits are typically paid within 30 to 60 days of the filing of a claim although delays can arise but once applied, the benefits will definitely come in.

0 Shares:
Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like
How Do banks Make Money
Read More

How Do Banks Make Money

Table of Contents Hide Ways Banks Make Money1. Interest Income:  2. Capital Market-Related Income:  3. Fee-Based Income:  4. Interbank Lending:  5. Brokers…