1. What Is Cost Per Thousand Coverage?

Cost per thousand is a standard metric used in the insurance industry to compare the cost efficiency of different term life insurance policies. It represents how much you pay for each $1,000 of coverage, making it easier to compare policies with different coverage amounts.

2. How Does The Calculator Work?

The calculator uses the following formula:

Where:

• Premium — Your annual premium payment
• Coverage — The death benefit amount of your policy

Explanation: This calculation standardizes the cost of insurance across different coverage amounts, allowing for apples-to-apples comparisons between policies.

3. Importance Of Cost Per Thousand Calculation

Details: Calculating cost per thousand helps consumers make informed decisions when shopping for term life insurance. It eliminates the confusion of comparing policies with different premium and coverage combinations, revealing the true value of each policy.

4. Using The Calculator

Tips: Enter your annual premium amount and the total coverage amount of your policy. Both values must be positive numbers. The calculator will compute how much you're paying for each $1,000 of coverage.

5. Frequently Asked Questions (FAQ)

Q1: Why is cost per thousand important?
A: It allows you to compare insurance policies with different coverage amounts on an equal basis, helping you identify the most cost-effective option.

Q2: What is a good cost per thousand rate?
A: Rates vary by age, health, and policy term, but generally, lower rates indicate better value. Competitive rates for healthy individuals typically range from $0.50 to $2.00 per $1,000 of coverage.

Q3: Does cost per thousand change with age?
A: Yes, typically costs increase with age as the risk to the insurer increases. This is why purchasing life insurance at a younger age is generally more affordable.

Q4: Are there other factors besides cost to consider?
A: Yes, you should also consider the insurer's financial strength, policy terms and conditions, exclusions, and the company's reputation for customer service and claims payment.

Q5: How often should I review my cost per thousand?
A: It's good practice to review your insurance costs every 2-3 years or when your life circumstances change significantly (marriage, children, etc.).