Life insurance is a necessity for nurses who have loved ones counting on them, financially.
Most nurses, nurse practitioners, and Certified Registered Nurse Anesthetists (CRNA) who have life insurance through their employer. However, in the event of an untimely death, they’re often unknowingly underinsured, leaving family with a reduction of financial security amid their grief.
This is a huge problem considering the general affordability of term life insurance. We’ll look at what life insurance the nursing and nurse practitioner community tends to buy, how much coverage you need, and where to take action if it’s clear you need more coverage.
What life insurance do nurses and nurse practitioners have?
We tapped into our diverse network of readers to learn their understanding of life insurance options. Our 2022 Student Loan Planner Insurance Survey had approximately 1,500 respondents from varying career fields and educational backgrounds.
Out of that group, 82 respondents were nursing professionals. Here’s what we learned about the nursing community and life insurance.
Nursing professionals have a big disparity between needing vs. buying life insurance
We found the majority of nurses, CRNAs and nurse practitioners believed they needed to buy term life insurance. The response break-down is as follows:
- 62% of nurses.
- 69% of CRNAs.
- 75% of nurse practitioners.
However, the number of nursing professionals who actually have their own term life insurance policy paints a different picture. Only 43% of nurses and 54% of CRNAs carry their own policy outside of their employer coverage.
Nurse practitioners had a shocking disparity between what they think they need versus what they actually have. Only 28% of nurse practitioners followed through with providing their own life insurance coverage. But they had the highest percentage of employer-sponsored life insurance. It’s safe to say that most nurse practitioners rely on limited coverage through their employer rather than being properly insured on their own.
Let’s take a look at life insurance options for nurses, including ideal coverage amounts and average costs.
Do nurses need life insurance?
If someone will be significantly financially affected by your passing away, then you need life insurance as a nurse.
To be clear, when we talk about life insurance, we’re supporting term life insurance. This is what the vast majority of people and professions need — not a complex financial product, like whole life insurance, that comes with outrageous commissions and fees.
Special life changes
Common scenarios that trigger people to seek life insurance include getting engaged or married, planning for a child or already having dependents, or transitioning your spouse out of the workforce.
Nurses also have special considerations to think about when it comes to life insurance. Healthcare providers have unique workplace hazards, such as potential exposure to infectious diseases. Case in point, nursing professionals were at the frontlines of the pandemic.
Unusual commuting hours
They also have to drive into a physical work location, often at strange hours. My mother worked as a labor and delivery nurse for decades. One night, she was the victim of a drunk-driving car accident while coming home from a long shift at the hospital.
Luckily, she was OK, but the plain truth is that nurses place themselves at greater risk of events like this compared to their Zoom-reliant counterparts in the professional world.
Higher toll on mental health
Additionally, the demanding nature of nursing can take a toll on both your physical and mental health. Unfortunately, nurses are at higher risk of suicide than the general population.
If you have children, a spouse or a partner that would be negatively affected by permanent loss of your income, you need term life insurance of your own. The coverage you have at your hospital is probably inadequate for nurses with dependents.
The good news is the risk of something happening to you is very low, so the cost of buying adequate protection is not very high.
How much life insurance do nurses need?
Most people need term life coverage equivalent to at least 10 times their salary. However, if you’re the breadwinner of your household or have multiple kids (or both), then we recommend 10 to 15 times your salary as your starting point to determine the amount of coverage.
As a general rule, we recommend rounding up to the nearest $500,000 when choosing your policy.
Basic formula: Salary x 10 = Minimum Coverage (rounded up to nearest 500K) = Policy Amount
Let’s look at a couple of examples. Although there are many types of nurses, let’s focus on registered nurses (RN).
The average salary for an RN is $75,330, according to Bureau of Labor Statistics (BLS) data. Using this salary as our guide, the average nurse needs at least $1 million in life insurance coverage.
Here’s the math: $75,330 x 10 = $753,300 (rounded up to nearest 500K) = $1 million
However, the average breadwinning nurse with dependents needs at least $1 million to $1.5 million of coverage.
Our survey found that 51% of nurses are the breadwinners of their households. Whereas, 85% of CRNAs and 75% of nurse practitioners are the primary income earners.
This suggests that nursing professionals overall are very underinsured, especially in the case of breadwinning nurse practitioners. Remember, only 28% of our nurse practitioner respondents had their own term policy outside of work. Yet, 75% of their family are primarily reliant on their income.
What life insurance benefits do nurses get through work?
Employer-sponsored life insurance is better than nothing. But it’s woefully inadequate across the board.
Employer group benefit plans often provide minimal coverage that is capped at one or two times the employee’s salary. For example, Baylor Scott & White Health provides basic life insurance of one times its employee’s annual salary with the option for out-of-pocket supplemental plans.
For others, coverage is based on a set amount, such as $50,000. This simply isn’t enough.
From our survey, we determined that 38% of CRNAs, 46% of nurses and 66% of nurse practitioners have life insurance coverage through their employer.
This suggests there’s a strong need for additional coverage within the nursing profession. Many nurses have no coverage whatsoever, while others simply don’t have enough due to their employer’s limited plan.
How much does term life insurance cost for nurses?
Your term life monthly premium will be based on a variety of factors, such as age, gender, coverage amount, policy term and overall health.
For all surveyed nursing professions, the average monthly cost of their existing life insurance policy was $86 to $167 per month. But payments ranged from several dollars a month to just shy of $400 per month.
Term life insurance is generally very affordable. So, it’s likely some of the data was skewed by whole life insurance policy payments.
Therefore, let’s look at some specific examples of what you might expect to pay with a term life insurance plan.
Nurses join the profession at all ages, usually from their early 20s to late 30s. So, let’s focus on two different examples for a 25-year-old nurse versus a 35-year-old nurse. We’ll use our earlier example of RNs needing at least $1 million in coverage based on the average nurse salary.
Running cost estimates through various life insurance companies, here’s what a $1 million term life policy for a 20-year term could cost for someone in excellent health:
- 25-year-old female – $23 per month
- 25-year-old male – $30 per month
- 35-year-old female – $28 per month
- 35-year-old male – $33 per month
Now, let’s say these nurses are interested in a $1.5 million policy instead. They’d be looking at:
- 25-year-old female – $31 per month
- 25-year-old male – $42 per month
- 35-year-old female – $40 per month
- 35-year-old male – $46 per month
As you can see, increasing your policy coverage won’t cost you an arm and leg. But it will help your family tremendously if the worst-case scenario were to ever happen.
If you’d like a free life insurance quote for your policy scenario, use this SLP insurance quote tool.
Best term life insurance options for nurses
When it comes to choosing life insurance as a nurse, nurse practitioner or CRNA, keep it simple.
- 20-year term. You need a policy that’ll cover you for the years your children or spouse are dependent on your income, making a 20-year term sufficient. You might consider a 30-year term if your children’s ages are spread out or want the added security.
- Lifestyle maintenance. You want enough coverage to keep your loved ones in the lifestyle you desire. This includes future expenses, like the mortgage, debt payments, your child’s education and more. It can be difficult to estimate all of these expenses, which is why it’s safer to go with 10- to 15-times your income.
- Medical exam requirement. A smaller policy amount might not need a medical exam. However, if you’re buying $1 million or more, some insurance companies require it. A medical exam can help nurses who are in good health get the cheapest rate possible.
You also might be able to tap into a special insurance partnership through an organization or professional society you’re affiliated with.
There are tons of nursing associations, so check all of your options depending on your memberships. For example, the American Nurses Association members can access term life insurance with Prudential.
However, these types of group benefit plans are often more expensive or have more limited options than shopping around for your own plan. Plus, they don’t allow for easy comparison of insurance providers, which means you could be missing out on a better, more affordable policy.
To compare over a dozen term life insurance options, start the free quote process today.
Bottom line: The enemy of a good plan is the perfect plan. Get a simple and affordable term life policy in place as soon as possible and ignore the rest of the insurance agent sales noise that’s out there.