Life Insurance for Police Officers: What Rates to Expect?
Life insurance is important for all types of people. Police officers have an increased need for life insurance because of the danger inherent in their jobs. Although many police departments provide some life insurance, most of the policies offered are inadequate on their own.
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If anyone relies on you financially, life insurance is a must-have. In the event of your death, your loved ones and dependents shouldn't have to face a financial burden or go into debt while grieving.
When you have life insurance, its benefits can be used to cover your medical bills, funeral expenses, etc. Life insurance benefits will keep your family and other dependents afloat financially and allow them to survive without your income.
Police officers have an increased need for life insurance because of the danger inherent in their jobs. Although many police departments provide some life insurance, most of the policies offered are inadequate on their own. Police officers should closely research any life insurance they are offered by their department and consider supplementing it with an additional policy.
The Importance of Life Insurance for Police Officers
The danger of police work is well-documented. According to the National Law Enforcement Officers Memorial Fund, over 22,000 police officers in the U.S. died while in the line of duty since the first recorded officer death. Police officers are also always listed on USA Today's annual list of most dangerous jobs.
The Bureau of Labor Statistics compiles more detailed information about work-associated deaths. In 2018, the most recent year for which data is available, police officers suffered fatal injuries at a rate of 13.7 per 100,000 people. This is over quadruple the average fatal injury rate for all occupations, which is 3.5 per 100,000 people.
Police officers of any role are at increased risk, though patrol officers face the highest risk of fatality while on the job. The Bureau of Labor Statistics found that police officers in the following positions suffered life-ending injuries:
Police and Sheriff's Patrol Officers
Transit and Railroad Police
First-Line Supervisors of Correctional Officers
First-Line Supervisors of Police and Detectives
Bailiffs
Correctional Officers and Jailers
Detectives and Criminal Investigators
The Bureau of Labor Statistics also categorizes the cause of each police death. In 2018, they determined that police have died due to the following causes:
Violence and injuries by persons or animals: homicides, suicides
Transportation: roadway incidents, pedestrian vehicular incidents, rail vehicle incidents, non-roadway incident
Other
Past years have shown the "other" causes of death include:
Falls: same level, lower level
Exposure: heat, electricity, drowning, exposure to other harmful substances
Contact with objects/equipment
This data demonstrates the importance of life insurance for police officers.
Do Police Receive Life Insurance Through Their Department?
Unfortunately, many police officers are underinsured, even when their departments offer life insurance. Because each police department falls under a different government body, there aren't consistent standards for department-offered insurance. Some police departments give their officers excellent life insurance for free, while others don't offer life insurance benefits at all. Most fall somewhere between those two extremes, with nearly all departments offering at least some life insurance.
To complicate matters, many life insurance policies offered through departments come with two tiers of benefits:
Benefits granted for line of duty deaths
Benefits granted for off-duty deaths
Police departments don't always take time to thoroughly explain to police officers what their life insurance covers. Officers who don't read every word of fine print might miss that if they were to pass away while off-duty, they'd have little to no benefits at all.
How much insurance an officer needs depends on multiple factors:
The amount of life insurance their department provides
The type of pension benefits their department provides
Their age and number of years away from retirement
Their spouse's income and retirement fund situation
How many kids they have and their ages
Their overall amount of assets and debt
Another factor to consider is how long the officer plans on staying in the department, and if they plan on working after retirement. Some department-offered insurance ends at the time of retirement. If that's true for your situation, you might want to increase any supplemental life insurance you purchase now prior to your retirement date. Of course, if you find a new job after retirement, the new company might also offer life insurance benefits.
How Much Life Insurance Do Police Need?
A general rule for people working in any industry is to purchase life insurance that's worth 10 to 15 times the amount of your yearly salary, so your dependents will be covered for years to come. Of course, there are exceptions to every rule. The amount of life insurance you need depends on your unique financial situation.
When trying to determine the amount of life insurance you need, estimate:
Mortgage loan balances
Car loan balances
Any other loan or credit balances
Potential end-of-life medical bills
Funeral and arrangement costs
Children's future college tuition costs
Family living expenses for as many years as you desire
Once you've calculated these amounts, add them together. The number you come up with is the bare minimum amount you need in a life insurance policy.
People tend to underestimate and forget about costs, so you probably want to take out a policy that covers more than your bare minimum amount. Plus, it's good to add padding for emergencies and unforeseen situations. If you want to set up your loved ones with even more, or so your spouse doesn't have to work again, purchase a policy accordingly.
Finally, life insurance policy purchasers must take into account what they can afford. Many of us would like to set up our loved ones for life, but that might not be practical. So, be sure to balance your needs with what you're realistically able to pay without causing yourself hardship.
How Life Insurance Rates Are Determined
The cost of life insurance depends on a few different factors. One of the major determinants of the price of a life insurance policy is the type of life insurance you choose. There are two types of life insurance:
Like the name states, term life insurance lasts for a specific term. This period of time is usually 10, 20, or 30 years, though some companies offer terms in increments of 5 years. Term life insurance comes with specific benefits that your designated recipients receive if you die within that timeframe.
Conversely, permanent life insurance policies last for the rest of your life. Permanent policies also differ from term policies in the sense that they also function as investments. If you want to cash out your permanent life insurance policies for cash, you can. On the other hand, term policies cannot be cashed out while the policyholder is still alive.
Generally, term life insurance policies are significantly less expensive upfront compared to permanent life insurance. If you can afford a permanent plan, however, and are interested in an investment opportunity, permanent might be a good option for you. Be sure to compare and contrast the costs and benefits associated with term vs. permanent life insurance policies to determine which type best fits your needs.
Life Insurance Premium Rates for Police Officers
Generally, police officers have the same life insurance options as everyone else. That said, some life insurance companies charge more to people who work in high-risk jobs, which includes police officers. This pricing policy is consistent with charging more to cigarette smokers, people with high cholesterol, and anyone who has a higher statistical risk of dying due to their health or life circumstances.
Not all insurance companies charge more to people in high-risk positions, however. Police officers should compare and contrast life insurance rates from multiple companies before choosing one. Some companies only charge higher rates to police officers on a SWAT team or bomb squad, and some companies don't charge a higher rate to any officers.
Average life insurance rates vary widely based on each person's personal characteristics and the amount of coverage they want. Life insurance costs more for men because men have a lower lifespan, on average. The cost of life insurance increases with age, so it's a good idea to purchase it as soon as possible. Some policies require health exams and blood tests and will increase costs if health risks are found.
The lowest life insurance rates average $133 for women purchasing a $250,000 20-year term policy at age 30. In contrast, a 60-year-old man purchasing a permanent policy pays an average of $32,547. To calculate your likely life insurance rate, input your information into NerdWallet's life insurance rate calculator.
Where to Find Life Insurance for Police Officers
First, check with your department to see what life insurance policy they offer, if any. Once you fully understand the benefits of that policy, determine how much additional coverage you need.
There are three main avenues you can use to purchase life insurance:
Online insurance brokers
Traditional agents working face-to-face
Direct from an insurance company
If you conducted research independently and feel confident in the policy you'd like, you could go directly to an insurance company. Insurance brokers and agents are knowledgeable, however, and can offer you personalized attention. If you want someone to help find the best policy for you in terms of both price and benefits, enlist help. At Policy Scout, we offer an online tool to match you with acceptable insurance options for your situation.