Life Insurance Cost Calculator
Find out how much life insurance costs monthly, including whole, universal, and term life insurance.
What Is The Cost Of Life Insurance
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.
Key Factors Influencing Life Insurance Premiums
1. Age and Health
Your age and health are crucial in determining your life insurance premium. The logic is simple: the younger and healthier you are, the less risky you are to insure, and hence, the lower your premiums. Imagine you’re buying years of coverage; a 25-year-old with more ‘years’ to buy will typically pay less than a 50-year-old for the same type of policy. This difference reflects the increased risk and shorter coverage period for older policyholders.
2. Type of Policy
The type of life insurance policy you choose significantly affects how much you’ll pay.
Term Life Insurance
- What is it? Term life insurance is like renting insurance for a specific period, usually 10 to 30 years.
- Ideal Premium: A good rule of thumb is keeping your monthly premium under $100. This affordability makes it popular, especially for young families and individuals.
- Why Choose Term Life? It’s straightforward and cost-effective, providing peace of mind without a hefty price tag.
Whole Life Insurance
- What is it? Whole life insurance is more like buying a home than renting. It covers you for your entire life and includes a savings component.
- Ideal Premium: Aim for a premium under $250 per month. While it’s pricier than term life, the lifelong coverage and savings component add significant value.
- Why Choose Whole Life? It’s an investment in your family’s future, ensuring long-term stability and financial support.
Universal Life Insurance (UL)
- What is it? UL is a flexible version of whole life insurance, allowing you to adjust premiums and coverage amounts.
- Ideal Premium: A reasonable premium for UL is under $200 per month. This flexibility comes with a slightly higher cost than term life but offers more control.
- Why Choose UL? This type of policy is ideal for those who want the benefits of whole life insurance but with the ability to adjust their premiums and coverage amounts over time.
Final Expense Insurance
- What is it? This is a smaller policy designed to cover funeral expenses and other final costs.
- Ideal Premium: A good premium for final expense insurance is around $50 per month, making it affordable for most budgets.
- Why Choose Final Expense? It eases the financial burden on your loved ones during a difficult time, covering essential end-of-life expenses.
3. Coverage Amount
The amount of coverage you opt for directly impacts your premium. Similar to how the cost to fill up a larger gas tank is higher, a larger coverage amount will result in a higher premium. It’s about balancing how much financial support you want to provide your beneficiaries against the premium you can afford.
4. Lifestyle Choices
Your lifestyle choices, like smoking or participating in high-risk sports, can increase your premiums. Insurers view these activities similarly to how car insurance companies view a race car driver: with higher risk comes higher premiums.
Your job can influence your life insurance costs. Occupations deemed high-risk, such as construction work, might lead to higher premiums, similar to the way insuring a sports car is more expensive than a family sedan due to the increased risk of accidents.
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.
A person’s age is a factor in determining term life insurance rates. As you get older, rates will continue to increase.
The term life insurance quotes below are for 20-year term life insurance policies
These are the average monthly life insurance costs based on age/gender/policy size.
10-Year Term Life Insurance Rates By Age And Gender
Below is a general table that roughly estimates the average monthly cost of a 10-year, $500,000 term life insurance policy, segmented by age and gender. These are approximate figures, and premiums can vary based on the insurer, health, and other underwriting factors. These are assuming no tobacco use and preferred plus rates
|Age||Average Monthly Cost (Male)||Average Monthly Cost (Female)|
20-Year Term Life Insurance Rates By Age And Gender
Here is a sample table covering the average annual rate for a 20-year term life insurance $500,000 policy based on age and gender. These are assuming no tobacco use and preferred plus rates
|Age||Men (Monthly Rate)||Women (Monthly Rate)|
30-Year Term Life Insurance Rates By Age And Gender
Here is a sample table covering the average annual rate for a 30-year term life insurance $500,000 policy based on age and gender. These are assuming no tobacco use and preferred plus rates
|Age||Men (Monthly Rate)||Women (Monthly Rate)|
|70||Not Available||Not Available|
Whole Life Insurance Rates
Whole life insurance premiums, sometimes called straight life insurance, are typically fixed and do not adjust over time like universal life insurance. These are sample monthly premium rates based on age, gender, coverage amount, Preferred status, and non-tobacco consumers.
Universal Life Insurance Rates
This type of policy is ideal for those who want the benefits of whole life insurance but with the ability to adjust their premiums and coverage amounts over time.
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.
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
Related Reading: The best life insurance companies that we recommend
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 providing 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.
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.
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.
Frequently Asked Questions
What is affordable life insurance?
Affordable life insurance is a type of coverage that provides financial protection to beneficiaries in the event of the policyholder’s death. With competitive premiums and various policy options, affordable life insurance allows individuals to secure their loved ones’ future without straining their budget. It’s essential to compare quotes from different insurers to find the most suitable and cost-effective plan.
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.
What is the average life insurance monthly cost?
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 life insurance cost?
Whole life insurance premiums are generally higher than term life insurance due to lifelong coverage and cash value accumulation. The cost of whole life 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.
If you are married with young children and make $75,000 per year, how much term life insurance should you have?
The amount of term life insurance needed varies based on individual circumstances, but a common guideline is to have a policy worth 10 to 12 times your annual income, especially if you have dependents. For someone earning $75,000 per year with young children, this would suggest a policy between $750,000 to $900,000. This amount aims to cover living expenses, debts, and future needs like education for your children. When determining the exact amount, it’s also important to consider any existing savings, debts, and your spouse’s income.
What is the age limit for life insurance?
Insurance companies usually offer coverage to applicants over age 85, but certain companies may limit coverage to 80 or 90. In addition, term life insurance policies are available in different lengths, with most companies offering a maximum of 30 years, while others may offer policies for up to 35 or 40 years.
What is the average life insurance payout?
The average life insurance payout isn’t a constant number. It significantly varies based on the type of policy, the policyholder’s age, health, and other factors.
How much should life insurance cost?
The cost of life insurance varies depending on factors such as age, health, and coverage amount. On average, a healthy individual can expect to pay between $30 and $100 per month for a term life insurance policy. However, it’s recommended to get quotes from different providers to determine the exact cost for your specific needs.
How much will permanent life insurance cost?
Permanent life insurance costs can vary based on factors such as age, health, and coverage amount. Generally, these policies are more expensive than term life insurance due to the lifelong coverage and cash value accumulation. It is advisable to compare quotes from different providers to find the best permanent life insurance cost for your specific needs.
What is guaranteed life insurance over 50?
Guaranteed life insurance over 50 is a type of insurance policy specifically designed for individuals over the age of 50. It offers coverage without the need for a medical exam or health questions. This type of insurance provides peace of mind, as it guarantees a payout to beneficiaries upon the policyholder’s death.
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