What is the average cost of life insurance? This is a question that many people ask, but it can be hard to find an answer. Life insurance rates are calculated using your age and health status, but they may also consider your employment, weight, smoking status, and family medical history. At The Annuity Expert, we’ve compiled rates for various policy types and customer profiles to calculate the average cost of life insurance. This guide will discuss the average life insurance cost and the factors affecting your price.
- Life Insurance Average Cost Is…
- Premium For Life Insurance Calculator
- Average term life insurance rates by age and gender
- Average whole life insurance rates by age and gender
- Average burial insurance rates by age and gender
- Overpriced Life Insurance
- Factors Affecting Life Insurance Costs
- How to Calculate the Average Life Insurance Cost
- Strategies to Optimize Life Insurance Coverage While Minimizing Costs
- Understanding Factors That Affect Life Insurance Costs
- How do I get the best life insurance rate?
- Next Steps
- Need Help Getting Life Insurance Coverage?
- Frequently Asked Questions
Life Insurance Average Cost Is…
The average cost of life insurance for a 20-year-old is $250 per year. This is for a policy with a death benefit of $500,000. For a 30-year-old, the average cost goes up to $400 per year. And for a 40-year-old, the average cost is $600 per year. Again, these rates are for healthy individuals with no significant health problems.
Of course, the older you are, the more expensive life insurance rates become. This is because your risk of death increases as you age. For example, a 55-year-old will pay an average of $950 per year for a policy with a death benefit of $500,000. And a 65-year-old will pay an average of $1700 per year for the same coverage.
Regardless of age, you can do a few things to get cheaper life insurance rates. One is to quit smoking if you currently smoke. This can save you up to 50% on your premiums. Another is to get in shape and maintain a healthy weight. This can also save you money on your premiums.
Premium For Life Insurance Calculator
Find out how much life insurance costs per month, including whole, universal, and term life insurance.
Average term life insurance rates by age and gender
Term life insurance is a type of life insurance policy that provides coverage for a specific period of time, typically ranging from one to thirty years. Unlike whole life insurance, term life insurance does not accumulate cash value over time and is generally less expensive.
The age of a person is a factor in determining life insurance rates. As you get older, rates will continue to increase.
The term life insurance quotes below are for a 20-year term life insurance policy with a death benefit of $250,000, $500,000, $750,000, and $1,000,000.
| Age | Gender | $250k | $500k | $750k | $1,000,000 |
|---|---|---|---|---|---|
| 25 | Female | $10.95 | $16.37 | $21.79 | $22.98 |
| Male | $12.30 | $19.08 | $25.86 | $30.54 | |
| 35 | Female | $12.45 | $18.20 | $24.54 | $30.53 |
| Male | $13.80 | $21.64 | $29.70 | $33.93 | |
| 45 | Female | $21.24 | $36.95 | $52.67 | $67.85 |
| Male | $26.19 | $46.67 | $67.24 | $87.81 | |
| 55 | Female | $45.37 | $84.36 | $123.78 | $158.80 |
| Male | $61.24 | $114.71 | $169.30 | $221.55 |
Our findings show that the increase in monthly premiums as you age is much smaller if you are young than older.
Average whole life insurance rates by age and gender
Whole life insurance is a type of permanent life insurance policy that provides coverage for the entire lifetime of the policyholder as long as premiums are paid. In addition to the death benefit paid to the beneficiary upon the insured’s death, whole life insurance also accumulates a cash value over time that can be borrowed against or used to pay premiums.
Life insurance premiums are determined using an individual’s age. Permanent life insurance rates will continue to rise as you age since your life expectancy decreases.
The life insurance quotes below are for whole life insurance policies with a death benefit of $250,000, $500,000, $750,000, and $1,000,000.
| Age | Gender | $250k | $500k | $750k | $1,000,000 |
|---|---|---|---|---|---|
| 25 | Female | $108.50 | $211.75 | $315.00 | $418.25 |
| Male | $120.97 | $236.69 | $352.41 | $468.13 | |
| 35 | Female | $163.41 | $321.56 | $479.72 | $637.88 |
| Male | $179.16 | $353.06 | $526.97 | $700.88 | |
| 45 | Female | $255.72 | $506.19 | $756.66 | $1,007.13 |
| Male | $281.75 | $558.25 | $834.75 | $1,111.25 | |
| 55 | Female | $417.38 | $829.50 | $1,241.63 | $1.653.75 |
| Male | $462.66 | $920.06 | $1,377.47 | $1,834.88 |
Average burial insurance rates by age and gender
The cost of burial insurance, also known as final expense insurance, can vary depending on several factors, including age, gender, health, and the amount of coverage needed. Given that women typically have longer life expectancies than men, burial insurance rates are generally cheaper for younger people and women.
The whole life insurance quotes below are for a life insurance policy with a death benefit of $20,000, $25,000, $30,000, and $40,000.
| Age | Gender | $20k | $25k | $30k | $40k |
|---|---|---|---|---|---|
| 55 | Female | $52.21 | $64.46 | $76.71 | $101.21 |
| Male | $65.30 | $80.81 | $96.32 | $134.18 | |
| 65 | Female | $78.82 | $97.72 | $116.63 | $154.43 |
| Male | $109.75 | $136.39 | $163.03 | $216.31 | |
| 75 | Female | $141.62 | $176.22 | $210.82 | $280.03 |
| Male | $196.74 | $254.13 | $293.51 | $390.28 | |
| 80 | Female | $193.66 | $241.28 | $288.89 | $384.12 |
| Male | $276.26 | $334.52 | $412.78 | $549.31 |
Overpriced Life Insurance
The following life insurance companies overprice their life insurance. Why pay too much when you could either save money or buy twice the coverage?
- AAA Life Insurance
- Allstate Life Insurance
- American Family Life Insurance
- Erie Life Insurance
- Farmers Life Insurance
- Geico Life Insurance
- Globe Life Insurance
- State Farm Life Insurance
- Colonial Penn Life Insurance
- USAA Life Insurance
- Progressive Life Insurance
Factors Affecting Life Insurance Costs
Life insurance premiums are determined based on various factors that affect the risk profile of the insured individual. Understanding these factors can help you comprehend why life insurance costs may vary from person to person. Here are the key factors that influence life insurance costs:
- Age: Age plays a significant role in determining life insurance premiums. Typically, the younger you are when you purchase a life insurance policy, the lower your premiums will be. This is because younger individuals are considered at a lower mortality risk than older individuals.
- Health: Your health status also impacts your life insurance premiums. Insurance companies assess your health through a medical examination and review of your medical history. If you have preexisting health conditions or engage in risky behaviors such as smoking, your premiums may be higher to reflect the increased risk to the insurance company.
- Gender: Gender is another factor that can affect life insurance costs. Statistically, women tend to live longer than men and, as a result, may pay lower premiums for life insurance coverage.
- Coverage amount and term: The coverage amount and term of the life insurance policy also impact the premiums. Higher coverage amounts and longer terms generally result in higher premiums, which entail a greater financial risk for the insurance company.
- Occupation and hobbies: Certain occupations and hobbies that are considered high-risk, such as being a pilot or engaging in extreme sports, can also affect life insurance premiums. Insurance companies may charge higher premiums to individuals with riskier professions or hobbies, as they pose a higher likelihood of accidents or injuries.
How to Calculate the Average Life Insurance Cost
Calculating the average life insurance cost can be complex, as it depends on various factors that are unique to each individual. However, a simple way to estimate the average cost is to consider the following steps:
- Determine your coverage needs: Before calculating the average life insurance cost, assessing your coverage needs is crucial based on your financial obligations and goals. For example, consider your income, debts, funeral expenses, education expenses for children, and any other financial responsibilities you want to cover with your life insurance policy.
- Choose the type of life insurance: There are different types of life insurance policies, including term life insurance, whole life insurance, and universal life insurance. Each type has its cost structure and features, so understanding their differences is essential in calculating the average life insurance cost.
- Request quotes from multiple insurance providers: To get a realistic estimate of the average life insurance cost, it’s advisable to request quotes from multiple insurance providers. Insurance companies have different underwriting guidelines and pricing structures, so comparing quotes can help you find the best policy that meets your needs and budget.
- Factor in additional costs: Besides the basic premiums, there may be other costs associated with life insurance, such as policy fees, riders (additional coverage options), and administrative charges. Consider these additional costs when calculating the average life insurance cost.
Strategies to Optimize Life Insurance Coverage While Minimizing Costs
Life insurance is an essential financial tool that provides your loved one’s protection and peace of mind. However, optimizing your life insurance coverage while minimizing costs is also essential. Here are some strategies to help you achieve this:
- Buy life insurance early: Age is a significant factor in determining premiums. Purchasing life insurance at a younger age can help you lock in lower premiums, as younger individuals have a lower mortality risk. However, waiting until later to buy life insurance may result in higher premiums, so it’s wise to start planning and purchasing coverage as early as possible.
- Choose term life insurance: Term life insurance is generally the most affordable, as it covers a specific term, typically 10, 15, 20, or 30 years. In addition, term life insurance does not accumulate cash value, making it less expensive than other types of life insurance, such as whole life or universal life. Suppose your main objective is to provide financial protection for a specific period, such as until your children are grown or until your mortgage is paid off. In that case, term life insurance may be a cost-effective option.
- Assess your coverage needs regularly: It’s essential to reassess them regularly to ensure your life insurance policy aligns with your current financial situation and goals. For example, if your financial obligations have decreased, such as paying off debts or your children becoming financially independent, you may be able to reduce your coverage amount, which can result in lower premiums.
- Quit smoking: Smoking is a significant risk factor that can increase life insurance premiums. If you are a smoker, quitting smoking can improve your health and potentially lower your life insurance premiums. Many insurance companies offer non-smoker rates for individuals who have quit smoking for a certain period, usually one to two years. So, if you are a smoker, quitting smoking can benefit your health and your wallet in terms of life insurance costs.
- Bundle policies: Another strategy to save on life insurance costs is to bundle multiple insurance policies with the same provider. Many insurance companies offer discounts or reduced premiums for policyholders who have multiple policies, such as combining life insurance with auto, home, or other types of insurance. Bundling policies can help you save on insurance costs while maintaining comprehensive coverage.
Understanding Factors That Affect Life Insurance Costs
Several factors influence the cost of life insurance premiums. Therefore, these factors are essential to estimate the average life insurance cost accurately. Here are some key factors that can affect your life insurance premiums:
- Age: Age is one of the most significant factors that impact life insurance premiums. Younger individuals generally pay lower premiums than older individuals, as they are considered at lower mortality risk. However, as you age, the likelihood of developing health issues increases, which can result in higher premiums.
- Health condition: Your overall health condition determines life insurance premiums. Insurance companies assess your health status through a medical underwriting process, which may involve a review of your medical history, a medical exam, and other health-related factors. Individuals with preexisting health conditions, such as diabetes, heart disease, or cancer, may be deemed a higher risk and may face higher premiums.
- Lifestyle habits: Certain lifestyle habits, such as smoking, excessive alcohol consumption, and participation in high-risk activities like skydiving or rock climbing, can also impact life insurance premiums. These habits are considered higher risk and can result in higher premiums due to the increased likelihood of accidents or health issues.
- Coverage amount: The coverage amount or death benefit you choose also affects your life insurance premiums. Higher coverage amounts typically result in higher premiums. Therefore, it’s essential to carefully evaluate your coverage needs and choose an appropriate coverage amount that provides adequate protection for your loved ones without unnecessarily increasing your premiums.
- Type of policy: Your life insurance policy also impacts the cost. As mentioned earlier, term life insurance is generally more affordable than whole life or universal life insurance due to its limited term and lack of cash value accumulation. On the other hand, whole life and universal life insurance policies tend to have higher premiums due to their lifetime coverage and investment component.
- Gender: Gender can also affect life insurance premiums. Statistically, women tend to live longer than men, which makes them less risky in the eyes of insurance companies. As a result, women generally pay lower premiums compared to men.
- Family history: Your family history of medical conditions or premature deaths can also impact your life insurance premiums. Insurance companies may consider your family’s health history when assessing your risk level and determining your premiums. Therefore, if you have a family history of certain medical conditions, it’s essential to disclose it during the underwriting process to ensure accurate pricing of your life insurance policy.
How to Get Accurate Quotes for Life Insurance?
Accurate quotes from reputable insurance providers are crucial when estimating the average life insurance cost. Here are some steps to help you get accurate quotes for life insurance:
- Assess your coverage needs: Before requesting quotes, assess your coverage needs to determine the amount of life insurance you require. Consider your outstanding debts, financial obligations, future expenses, and income replacement needs. Understanding your coverage needs will help you request accurate quotes that align with your insurance goals.
- Provide accurate information: When requesting quotes, provide accurate and honest information about your age, health condition, lifestyle habits, family history, and other relevant factors. Providing accurate information ensures that the quotes you receive are tailored to your specific risk profile and there are no surprises regarding premiums or coverage later on.
- Shop around and compare quotes: It’s essential to shop around and obtain quotes from multiple insurance providers to compare costs and coverage options. Each insurance company may have its underwriting criteria, resulting in different premiums for the same coverage amount. Comparing quotes lets you choose the best option for your budget and coverage needs.
- Understand the policy details: Review the details carefully, including the coverage amount, terms, premiums, riders, and other terms and conditions. Ensure you understand the policy features, limitations, and any additional costs associated with the policy. Seek clarification from the insurance provider if you have any questions or concerns.
How do I get the best life insurance rate?
There’s no definitive answer to this question, as life insurance rates can vary significantly from person to person. However, there are a few things you can do to help ensure that you get the best possible rate on your life insurance policy:
- The best strategy is to shop around and compare quotes from multiple insurers when shopping for life insurance.
- Work with an experienced independent life insurance agent who can help you understand your options and find the best policy for your needs.
- Be sure to give accurate information when applying for life insurance coverage, which will impact your quoted premium.
- Remember that life insurance rates can change over time, so review your policy periodically is essential to ensure it meets your needs.
Helpful Tip: If you’re looking for cost-effective estate planning services, such as setting up a living trust or creating a last will and testament, we suggest taking advantage of the following:
Next Steps
Life insurance costs depend on various factors, such as the policy type, age, health, lifestyle, and the coverage amount. By understanding these factors and employing strategies to lower your premiums, you can find a policy that suits your needs and budget. Review your life insurance regularly to ensure you have the right coverage for your ever-changing life circumstances. Then, with the right approach and a people-first mindset, you can confidently secure your family’s financial future.
Need Help Getting Life Insurance Coverage?
If you have a preexisting medical condition and want to buy life insurance, you will need help from an expert. This person can help ensure you get coverage so you don’t get declined.
Warning: Applying for life insurance without a medical exam can be risky. If you get declined coverage, it could be at least two years before you can get any life insurance.
Frequently Asked Questions
How do I get the best price for life insurance?
The price of life insurance can vary depending on a person’s age, health, and coverage needs. Some people may get a better price on life insurance by shopping around and comparing rates from different insurers. Others may find that working with a life insurance agent or broker can help them get the best possible price on coverage.
What is a reasonable amount of life insurance?
Affordable life insurance is typically 10 to 12 times your annual salary. This coverage is usually enough to provide for your beneficiaries during your death. However, you may want to consider increasing your coverage if you have a large mortgage or other debts that need to be paid off, if you support dependents, or if you want to leave a financial legacy.
How much life insurance should I buy for myself?
The amount of life insurance you should buy for yourself depends on your circumstances. You’ll need to consider your dependents, debts, and financial goals. A life insurance agent can help you determine the right amount of coverage for you.
How much life insurance should a 50-year-old have?
A 50-year-old should have 10 to 12 times their annual salary in life insurance coverage. This coverage is typically enough to support their beneficiaries during their death. However, 50-year-olds may want to consider increasing their coverage if they have a large mortgage or other debts that need to be paid off if they support dependents or want to leave a financial legacy.
How much a month is life insurance?
Life insurance premiums are based on several factors, including age, health, and the amount of coverage you purchase. A healthy 30-year-old man can expect to pay around $35 monthly for a $500,000 policy. A 50-year-old woman with some health issues may pay closer to $90 monthly for the same coverage.
How much life insurance can one person have?
There is no limit to the life insurance one can have. Some people purchase multiple policies to cover different needs, while others may have one policy that provides them with the coverage. It all depends on your circumstances.
How much is life insurance a month on average?
The average monthly cost of life insurance varies widely based on policy type, age, health, and coverage amount. For a healthy individual in their 30s, a 20-year term life policy with $500,000 in coverage may cost between $20 and $30 per month. However, whole life or universal life policies, as well as factors like age, gender, and lifestyle, can significantly impact the monthly premium.
How much does whole life insurance cost?
Whole life insurance premiums are generally higher than term life insurance due to lifelong coverage and cash value accumulation. The cost varies based on age, health, and coverage amount. A healthy individual in their 30s might pay between $250 and $400 monthly for a $500,000 whole life policy. However, premiums can differ significantly based on individual circumstances, policy features, and the life and health insurance provider.
How much does term life insurance cost?
The cost of term life insurance varies based on age, health, coverage amount, and term length. For a healthy individual in their 30s, a 20-year term life policy with $500,000 in coverage may cost between $20 and $30 per month. However, premiums can be higher or lower depending on the insured’s unique circumstances, including older age, pre-existing medical conditions, or a larger coverage amount.
What is the average cost of a $10,000 life insurance policy?
The average cost of a $10,000 life insurance policy depends on the type of policy, age, health, and other factors. For a small term life policy, a healthy individual in their 30s may pay as little as $5 to $10 per month. However, the cost could range from $25 to $50 monthly for a whole life policy with the same coverage.
How much is life insurance for a 20-year-old?
The cost of life insurance for a 20-year-old depends on the type of policy, coverage amount, and health status. For a healthy 20-year-old, a 20-year term life policy with $500,000 in coverage may cost between $15 and $25 per month. Whole life insurance premiums will be higher, potentially ranging from $150 to $250 per month for the same coverage.
How much does $1 million life insurance cost?
The cost of a $1 million life insurance policy depends on factors such as policy type, age, health, and lifestyle. For a healthy individual in their 30s, a 20-year term life policy with $1 million in coverage may cost between $40 and $60 per month. Whole life insurance premiums will be higher, potentially ranging from $500 to $800 per month for the same coverage.
How much does $500,000 worth of life insurance cost?
The cost of a $500,000 life insurance policy depends on factors like policy type, age, health, and lifestyle. For a healthy individual in their 30s, a 20-year term life policy with $500,000 in coverage may cost between $20 and $30 per month. Whole life insurance premiums will be higher, potentially ranging from $250 to $400 per month for the same coverage.
What is the cost of life insurance at age 62?
The cost of life insurance at age 62 depends on factors such as policy type, coverage amount, and health status. For a healthy 62-year-old, a 10-year term life policy with $250,000 in coverage may cost between $75 and $150 per month. Whole life insurance premiums will be significantly higher, potentially ranging from $600 to $1,000 per month for the same coverage.
*Disclosure: Some of the links in this guide may be affiliate links. I may receive a commission at no cost to you if you purchase a policy. It helps us keep the lights on!