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 2023. Do follow closely for all the insights!
Life insurance is among the most important insurance policies everyone needs. This is the case because it ensures that all of your final expenses are paid and your insurance beneficiaries are taken care of.
Furthermore, it can come 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 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 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.
Table of contents
What is Life Insurance?
A life insurance policy is a contract 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 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. After this has been done successfully, the average life insurance payout is claimed.
Suppose the life insurance policy includes terminal illness coverage. In that case, the payout can be made directly to the policyholder on several occasions if he /she diagnosed as having less than 12 months to live.
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Life Insurance Payout Rates
There’s variation in the life insurance payout rates, and it’s dependent on the insurer. However, the average is 98.3%. This is speculation, and the reality far exceeds it.
What is the Average Life Insurance payout?
Average life insurance payout is a significant variation in the average life insurance payout, depending 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 policy’s beneficiaries, and payment will usually be received within 30 days.
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 they 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.
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Term Life Insurance versus Whole Life Insurance
Term life insurance is an insurance plan that helps provide 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 designed to provide 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, depending 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 determine how much premium one is entitled to.
Let me review 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
| Plan | Term | Average Premium Per Year |
| 100,000 Term-life | 20-year plan | $111 per year |
| 100,000 Term- life | 30-year plan | $147 per year |
| Whole life plan | Whole life | $724 per year |
Average Life Insurance Rates for Women Aged 20
| Plan | Term | Average Premium Per Year |
| 100,000 Term-life | 20-year plan | $264 per year |
| 100,000 Term- life | 30-year plan | $337 per year |
| Whole life plan | Whole life | $622 per year |
Average Life Insurance Rates for Men Aged 30
| Plan | Term | Average Premium Per Year |
| 500,000 Term-life | 20-year plan | $156 per year |
| 500,000 Term- life | 30-year plan | $240 per year |
| Whole life plan | Whole life | $2,385 per year |
Average Life Insurance Rates for Women Aged 30
| Plan | Term | Average Premium Per Year |
| 500,000 Term-life | 20-year plan | $208 per year |
| 500,000 Term- life | 30-year plan | $335 per year |
| Whole life plan | Whole life | $4,142 per year |
Average Life Insurance Rates for Men Aged 40
| Plan | Term | Average Premium Per Year |
| 250,000 Term-life | 20-year plan | $210 per year |
| 250,000 Term- life | 30-year plan | $384 per year |
| Whole life plan | Whole life | $3,508 per year |
Average Life Insurance Rates for Women Aged 40
| Plan | Term | Average Premium Per Year |
| 250,000 Term-life | 20-year plan | $185 per year |
| 500,000 Term- life | 30-year plan | $314 per year |
| Whole life plan | Whole life | $3,008 per year |
Average Life Insurance Rates for Aged Men 50
| Plan | Term | Average Premium Per Year |
| 1,000,000 Term-life | 20-year plan | $1,692 per year |
| 1,000,000 Term- life | 30-year plan | $3,301 per year |
| Whole life plan | Whole life | $21,480 per year |
Average Life Insurance Rates for Women Aged 50
| Plan | Term | Average Premium Per Year |
| 1,000,000 Term-life | 20-year plan | $1,233 per year |
| 1,000,000 Term- life | 30-year plan | $2,349 per year |
| Whole life plan | Whole life | $17,760 per year |
Average Life Insurance Rates for Men Aged 60
| Plan | Term | Average Premium Per Year |
| 250,000 Term-life | 20-year plan | $1,477 per year |
| 500,000 Term- life | 20-year plan | $2,793 per year |
| 1,000,000 Term-life | 20-year plan | $5,393 per year |
| 250,000 Whole life plan | Whole life | $8,783 per year |
Average Life Insurance Rates for Women Aged 60
| Plan | Term | Average Premium Per Year |
| 250,000 Term-life | 20-year plan | $1,033 per year |
| 500,000 Term- life | 20-year plan | $1,911 per year |
| 1,000,000 Term-life | 20-year plan | $3,637 per year |
| 250,000 Whole life plan | Whole life | $7,293 per year |
Check this out: How Long Does It Take To Get Life Insurance Money or Payout | Full Guide?
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 fully use them. Life insurance benefits are typically paid within 30 to 60 days of the filing of a claim. Although delays can arise once applied, the benefits will definitely come in.
