In your calculation, you should include expenses that will occur immediately after your death such as funeral costs and legal fees. To these one-time fees, add ongoing expenses such as groceries, clothing, utility bills, day care, mortgage payments and outstanding loans. You may also want to include the cost of sending your children to university. The sum of all these expenses is the amount of life insurance you will need. There is no set amount that everyone pays to obtain life insurance.
Insurance companies take a number of factors into account when calculating annual premiums.
These factors include the amount of the policy and its type, the age and sex of the person being insured and whether or not that person is a smoker. Term insurance is best suited to cover short-term expenses such as mortgage and the costs of education. Premiums remain constant during the life of the policy, but increase when it is renewed. Benefits are paid only if the person insured dies during the term of the policy. Premiums remain constant regardless of the age or health of the policyholder.