Understanding the cost of a $400,000 life insurance policy

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Life insurance provides financial protection for your loved ones by paying a death benefit if you pass away, helping cover expenses like mortgage payments, daily living costs, debts, or future goals like education. It’s an essential tool for anyone with dependents or financial obligations.

The amount of life insurance you need depends on several factors, including your income, debt, financial goals, and your dependents’ needs. For example, someone with a mortgage, young children, or a spouse who relies on their income might need a higher coverage amount to ensure their family is financially secure if something happens to them. Personal preferences and the desire to leave a legacy or contribute to charitable causes can also influence how much life insurance you should get.

A $400,000 policy may be ideal for individuals with a mortgage, outstanding debts, and family members who rely on their income. It ensures they have the resources needed to maintain their lifestyle and meet long-term goals.

For instance, if you have a $200,000 mortgage, other debts totaling $50,000, and want to leave $150,000 to help cover your children’s education and your spouse’s living expenses, this amount might be a good fit. It’s also important to account for inflation and potential changes in your family’s needs over time. A comprehensive assessment of your financial situation can help you determine if $400,000 — or another amount — is the right level of protection for your loved ones.

How much does a $400,000 life insurance policy cost?

How much you pay for life insurance will depend on your age, gender, and other personal factors. While your actual rate may vary, you can get a clearer picture of potential costs in the table below. Let’s break down what you can expect to pay if you’re in relatively good health for various term lengths.

Age	Gender	10-year term premium	20-year term premium	30-year term premium
25	Female	$175	$225	$321
25	Male	$209	$277	$406
30	Female	$178	$237	$354
30	Male	$209	$282	$432
35	Female	$187	$266	$408
35	Male	$214	$307	$489
40	Female	$240	$351	$550
40	Male	$279	$417	$689
45	Female	$343	$499	$805
45	Male	$401	$641	$1,086
50	Female	$487	$728	$1,258
50	Male	$596	$950	$1,732
55	Female	$693	$1,084	$2,137
55	Male	$908	$1,534	$3,025
60	Female	$1,019	$1,871	N/A
60	Male	$1,439	$2,657	N/A
65	Female	$1,687	$3,578	N/A
65	Male	$2,543	$5,024	N/A

*Rates are based on non-smokers receiving a Preferred health classification.

Factors that determine how much life insurance you need

Deciding how much life insurance to purchase depends on several key factors. Your coverage amount should align with your financial obligations and goals to ensure your loved ones are protected. Here are the primary factors to consider:

Your income: Your coverage should replace your income for a specific period — usually at least a decade — to help your family maintain their standard of living.
Outstanding debts: Include mortgages, car loans, credit card balances, and other debts that need to be paid off.
Dependents’ needs: Consider the cost of raising children, including childcare, education, and other daily expenses.
Future goals: Think about funding college tuition, retirement savings for your spouse, or leaving a financial legacy.
Existing assets: Take into account any savings, investments, or other resources your family can access.
Final expenses: Factor in funeral costs and other end-of-life expenses to avoid burdening your loved ones.

Who needs $400,000 in life insurance coverage?

The amount of life insurance you need depends on your individual circumstances. A $400,000 life insurance policy is a practical choice for individuals with moderate financial obligations, but not the right choice for people making six figures or those with large financial obligations. This coverage amount is often suitable for those with:

A moderate mortgage or debt, ensuring that payments are covered if something happens to you.
Dependents, such as a spouse or children, who rely on your income for day-to-day living expenses.
Long-term financial goals, such as funding a child’s education or providing for a spouse’s retirement.

If these expenses — including the amount of years you’ll need to cover them — add up to more than $400,000, you likely need additional coverage.

If you’re unsure whether $400,000 is the right amount, consult a financial advisor who can help you determine how much coverage you need.

Calculating how much life insurance you need

Determining the ideal life insurance coverage involves assessing your financial responsibilities and future plans. Most experts recommend at least 10 to 15 times your income in life insurance coverage. You can also calculate your needs by adding up the following:

Income: Multiply your annual income by the number of years your family would need financial support.
Debts: Include your mortgage, car loans, and other outstanding debts you want to pay off.
Future expenses: Consider major costs like college tuition, retirement funds for your spouse, and other long-term goals.
Final expenses: Plan for funeral costs and other end-of-life expenses.

Once you add everything up, subtract existing assets, such as savings, investments, and other resources your family could use. The number that is left is how much life insurance you should get.

Planning for the future doesn’t have to be overwhelming. By understanding your financial obligations and life insurance needs, you can take meaningful steps to protect your loved ones and secure peace of mind. Whether you’re just starting the process or revisiting your current coverage, taking action today can make a lasting difference for tomorrow.

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Nupur Gambhir

Managing Editor

Nupur Gambhir is a content editor and licensed life, health, and disability insurance expert. She has extensive experience bringing brands to life and has built award-nominated campaigns for travel and tech. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service.