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What Do '$9.95 a Month' Unit-Based Life Insurance Plans Actually Buy?
$9.95 a month life insurance buys one 'unit' of coverage, and what a unit pays shrinks as you age. How unit plans work and how to do the math.
Reviewed by Brian Carrozzi
Founder, RestAssured · Licensed life insurance agent
Updated · How we write and review
Short answer: A “$9.95 a month” life insurance plan usually buys one unit of coverage. The price of a unit stays the same, but the amount of coverage one unit buys depends on your age, and often your sex, when you apply. The older you are, the smaller each unit is. Most people need several units to cover a funeral, so the real monthly cost is usually a multiple of the advertised price.
How do unit-based life insurance plans work?
Some life insurance sold on TV and by mail doesn’t quote a coverage amount up front. Instead it advertises a low price for a unit, such as “$9.95 a month.”
Here’s the idea:
- Every unit costs the same. That’s the advertised price.
- What a unit pays is what changes. The insurance company sets the death benefit for one unit based on your age, and often your sex, at the time you apply.
- You can usually buy more than one unit, up to a limit set by the insurance company, to get more coverage.
So a 55-year-old and an 80-year-old might both pay the same price for one unit, but the 80-year-old’s unit pays a much smaller benefit. That isn’t a trick. It’s how life insurance pricing works: state regulators note that the older you are when you buy, the more coverage costs. A unit plan just shows the price differently, by shrinking the coverage instead of raising the price.
What about the waiting period?
Most unit-based plans advertised to seniors are guaranteed acceptance policies: no medical exam and no health questions. Because the insurance company accepts everyone, these policies typically include a waiting period (also called a graded or limited benefit period), often the first two years.
During that time, if death is from natural causes, the beneficiary usually receives the premiums paid, often plus some interest, not the full death benefit. Accidental deaths are usually covered in full from the start. The exact terms vary by insurance company and state, so read that section of the policy. Our guide to burial insurance with no waiting period explains how this works and how some people qualify for coverage that pays in full from day one.
How to work out what a unit plan really costs
You don’t need anyone’s rate chart to check a unit plan. Ask the insurance company one question: “How much does one unit pay at my age?” Then use this worksheet:
| Step | What to do | Why it matters |
|---|---|---|
| 1. Set a target | Decide how much your family will need (see funeral costs below) | Keeps you from buying too little, or too much |
| 2. Units needed | Target ÷ coverage per unit at your age, rounded up | The advertised price buys only one unit |
| 3. Real monthly cost | Units needed × price per unit | This is the number to budget for |
| 4. Cost per $1,000 | Monthly cost ÷ (total coverage ÷ 1,000) | Lets you compare fairly against any other policy |
| 5. Break-even years | Total coverage ÷ (monthly cost × 12) | How long until premiums paid add up to the benefit |
| 6. Unit limit | Ask the maximum number of units you can buy | Some limits may fall short of your target |
Step 4 is the most useful. The NAIC recommends comparing similar policies from different companies, and cost per $1,000 of coverage is the simplest way to compare a unit plan with a policy that quotes a dollar amount.
Step 5 matters most for people who expect to live a long time. With a guaranteed acceptance policy, it is possible to pay more in total premiums than the policy will pay out.
How much coverage do you actually need?
For many seniors, the goal is a funeral and a few final bills. The National Funeral Directors Association’s 2023 study put the national median cost of a funeral with viewing and burial at $8,300, and a funeral with viewing and cremation at $6,280. Prices vary a lot by area, so a quick call to a local funeral home gives you a better target.
Compare that target with what one unit buys at your age, and you’ll see why the advertised price is rarely what people end up paying.
When does a unit plan make sense?
A unit-based guaranteed acceptance plan can be a reasonable choice if:
- Health conditions rule out policies that ask health questions.
- You want a small, simple policy with no exam.
- You understand the waiting period and are comfortable with it.
It may not be the best value if:
- You can answer “no” to a few health questions. A simplified-issue whole life policy may give you more coverage for the same money and pay in full from the first day.
- You need more coverage than the unit limit allows.
- You’re comparing on the advertised price instead of the cost per $1,000.
For more on what drives the price after 70, see Cheapest Life Insurance for Seniors Over 70 and 75. For other ads that sound simpler than they are, see Is the $25,000 Final Expense Benefit Real?.
Questions to ask before you sign up
- How much does one unit pay at my age, in dollars?
- How many units can I buy, and what would my total monthly premium be?
- Can the premium or the benefit ever change after the policy is issued?
- Is there a waiting period, how long is it, and what is paid if I die during it?
- Is the company licensed in my state? Your state insurance department can confirm this.
- How long is the free look period? The NAIC says new policies can usually be returned for a full refund within a set period, often about 10 days, stated on the first page of the policy.
The bottom line
“$9.95 a month” is the price of one unit, not the price of the coverage most families need. Ask for the dollar amount per unit at your age, multiply it out, and compare the cost per $1,000 with other options. For people who can’t qualify any other way, guaranteed acceptance unit plans can still be useful. Many people in reasonable health find more coverage for the same budget elsewhere.
If you’d like a side-by-side comparison, a licensed agent can show you options from several insurance companies in your state, with no obligation. Here’s how our free agent service works.
Frequently asked questions
How much coverage does $9.95 a month buy?
It depends on your age, and often your sex, when you apply. On unit-based plans, $9.95 buys one unit, and the dollar amount of one unit gets smaller the older you are. Ask the insurance company for the exact amount per unit at your age before you buy.
What is a unit of life insurance?
A unit is a block of coverage sold at a set price. On fixed-price unit plans, the price per unit stays the same for everyone, while the death benefit each unit buys varies by age and other factors.
Is $9.95 a month life insurance worth it?
It can make sense for someone who can’t qualify for a policy with health questions, because acceptance is guaranteed. If you can answer health questions, a simplified-issue policy may give you more coverage for the same monthly cost and pay in full from day one. Compare cost per $1,000 of coverage to be sure.
Does the price of a $9.95 plan go up as I get older?
On most guaranteed acceptance whole life policies, the premium and death benefit stay the same once the policy is issued. Confirm this in the policy itself, because terms vary by insurance company and state.
Can I pay more in premiums than the policy pays out?
Yes. If you keep paying for many years, total premiums can exceed the death benefit. Divide the death benefit by the yearly premium to see how many years that would take.
Sources
- NAIC: A Consumer's Guide to Life Insurance
- NAIC Consumer Insight: Want to purchase life insurance? Tips to help you through the process
- Connecticut Insurance Department: Life and annuity insurance, what affects premium
- NFDA: 2023 Member General Price List Study
This article is for general education. Policy features, prices and eligibility vary by insurance company and state; your agent will explain the specific terms of any policy before you apply.