The average cost of life insurance: Rates based on age, term, and policy size

An average 20-year term policy for life insurance can cost over $147 per month. Life insurance costs an average of $21 per month, this figure is based upon a $500,000 20 year term policy for a healthy, non-smoker aged between 26 and 35. Quotacy data was used to calculate the average monthly cost. However, your actual monthly costs will depend on your health and lifestyle. Learn where you can find coverage at a lower price.

Life insurance is a way to provide financial support for your family members after you die. How much does life insurance cost you? It’s not easy to answer. The cost of life insurance varies based on many factors such as your age, gender, company, death benefit amount purchased, type of policy bought, and your health.

There are many types of life insurance. Each type has its advantages and disadvantages. The most popular type of life insurance is term insurance. This lasts for a certain period, typically 10 to 30 years. Whole life insurance is another option.

Whole life insurance is permanent, unlike term life insurance which has an expiration date for coverage. Permanent life is another option. This is similar to whole life insurance but offers more flexibility.

The cost of each policy is different because each type of coverage covers you differently. Bankrate can help determine if life insurance is right for your needs.

Although life insurance companies base their rates on your health and age, they also consider your work history, weight, smoking habits, and family history. Life insurance quotes don’t depend on where you live, unlike other types of insurance.

how much does life insurance cost?
how much does life insurance cost?

We have compiled life insurance rates for a range of policies and customer profiles in order to determine the average cost.

  • Average term insurance rates for
  • The average life insurance cost by gender
  • Term Life Insurance Rates by Policy Size
  • Term Life Insurance Rates by Policy Length
  • Views from the generation about the cost and benefits of life insurance

What is the cost of life insurance?

The cost of your life insurance will depend on many factors such as your age, gender, health, and the amount of coverage you buy.

Your premium will generally be lower if you are younger and healthier. Women are generally cheaper to insure because they have a longer life expectancy.

You may find a lower rate by comparing rates between different companies.

The average cost of life insurance is difficult to measure. The premium data that life insurance companies don’t report is the amount of premium written in a given year.

This may be done to protect policyholders’ privacy. The policyholder’s overall health and age would determine the average cost of life insurance.

The average premium of a company could be higher for policyholders who are older or in poor health, or any combination thereof. The privacy of clients could be endangered if average cost data is revealed.

Factors that affect your life insurance costs

When determining your eligibility and your premium, life insurance providers consider many factors. These costs can be better understood if you think of them as insurance providers, and consider how rates are determined based on risk.

Insurance companies know how to determine if you smoke, drink, or engage in risky behaviors. It is best to be honest when getting a quote for life insurance. If you lie to obtain a lower rate policy, your policy could be canceled or your death benefit will not be paid.

Gender

Women live longer lives than men. This means that you pose a greater risk to life insurers if you’re a man. This means that life insurance is more expensive for males than for females of the same health and age.

Age

The insurance company will likely pay more if you are older when you apply for a policy. Premiums tend to rise as you get older due to this higher risk.

Many financial professionals recommend purchasing life insurance as soon as you can to get lower premiums.

You will likely see lower monthly premiums if you purchase a permanent policy for life when you are young. While the premium for term policies remains the same, renewals will likely result in an increase due to your age.

Death benefit amount

How much coverage you need is also a factor in determining the cost of life insurance. A policy that provides financial support for funeral expenses, but costs $50,000 less than a policy with a $1,000,000 death benefit will cost you far less.

Types of life insurance

Term life insurance rates can be more affordable than permanent life insurance. Term insurance is only available for a specific period. Permanent life insurance, which includes whole life and unlimited life, is only valid for a specific period.

Permanent policies are intended to last until you die (unless you cancel or the policy lapses), so there’s a higher chance that an insurer will pay out your death benefit.

The rates for permanent life policies are usually higher to compensate.

Job

How much life insurance you purchase will also depend on your occupation. A dangerous job such as law enforcement, war reporting, construction, or construction could expose you to more risk than an office worker. You might have to pay more for life insurance because of this increased risk.

Health

The cost of life insurance depends on how healthy you are. Smoking tobacco will usually result in a significant increase in your premium.

Most life insurance policy types require that you complete a health questionnaire and/or a medical check-up before you are approved for a policy. Guaranteed-issue policies are available for customers with severe health conditions.

Consider a policy that requires you to have a medical exam. A company-approved nurse can visit your home and collect information about your health.

They may also check your resting pulse rate and blood pressure. The nurse may also take a sample of your blood in some cases.

The nurse may be able to conduct a medical exam at your doctor’s office.

Lifestyle

Your lifestyle can have an impact on the cost of your life insurance. Life insurance will cost you more if your lifestyle includes drinking alcohol and skydiving.

Insurance companies will charge more to compensate for the increased death risk associated with these activities.

Age-based average term life insurance rates

Our evaluation began by comparing the average life insurance rates of different age groups. The age factor will be used by life insurance companies to determine the premiums for life insurance.

Due to a decline in your life expectancy, rates will continue to rise as you get older.

These term life insurance quotes are for a 20-year term insurance policy that has a death benefit up to $500,000.

Our findings show that monthly premium increases are much less if you’re young than if you’re older. The average life insurance quote increases by only 4% between 25 and 30 but jumps significantly between 60 and 65, an average increase of 86% or $275.

Age
Monthly life insurance cost (nonsmoker)
Monthly life insurance cost (smoker)
25$31$86
30$33$92
35$38$117
40$50$179
45$78$277
50$118$426
55$190$663
60$318$1,007
65$593$1,528

You can see that premiums differ even more if you smoke. On average, smokers pay 218% more for life insurance policies than applicants who are not.

The average life insurance cost by gender

Life insurance quotes can vary based on gender, age, and other factors. On average, term life insurance will cost 23% more than it costs for women.

This is because men have a shorter lifespan than women. This is why life insurers will charge men more than women of the same age for their policies.

Age
Policy face value
Male premium
Female premium
30$250k$21$18
$500k$33$28
$1m$58$49
40$250k$30$25
$500k$50$41
$1m$93$76
50$250k$67$52
$500k$118$92
$1m$226$173

Rates for term life insurance based on policy size

The face value of your life insurance policy, which is the amount that will be paid to your beneficiaries upon your death, is crucial to financial planning.

average life insurance rates by policy face value
Average life insurance rates by policy face value

You should therefore carefully assess your assets and determine the face value based on future expenses.

You can provide adequate care for your family members by choosing a fair face value for your life insurance policy.

Term life insurance rates based on policy length

Below are the rates for term life policies with a 10-year and 20-year duration. As you can see the shorter term, the lower the life insurance premium that you will have to pay each year.

We have broken down premiums for each rating class. After you have completed a medical exam, a rating classification is the rating the life insurance company assigns to you. Your life insurance premium will be directly affected by the rating you get.

These metrics vary between life insurance providers, but they are the same across all companies. We have given a detailed description of each classification.

Life insurance rates for 10-year terms

Because they offer the lowest rates, 10-year policies are a good option for people with tight budgets. A 10-year policy is also useful for those who don’t need long-term coverage.

Policy face value
Preferred plus
Preferred
Standard
$100k$16$19$22
$250k$23$28$37
$500k$35$44$61
$1M$59$76$110

Rates for 20-year term insurance

The 20-year policy is the most popular option for term life insurance. It provides more coverage than the shorter 10-year version but has higher annual rates.

These policies are often recommended for young families with large debts and expenses such as school loans and mortgages. If the breadwinner dies unexpectedly, these policies can be very burdensome.

The family can usually pay off these debts in 20 years. This allows them to reduce the risk of having someone else foot the bill in the event that something happens.

Policy face value
Preferred plus
Preferred
Standard
$100k$17$19$23
$250k$25$30$38
$500k$40$49$65
$1M$69$86$117

Generational perspectives on the cost of life insurance

A conducted an online survey and found that 35% of respondents didn’t have life insurance. Over 40% of those surveyed said that life insurance is too costly.

Over half (53%) baby boomers, adults between 54 and 72 years old, believe that premiums for life insurance are too high and therefore do not have it.

It can be cheaper to invest in a policy while young, but boomers are now feeling the consequences, such as the price, of waiting until later in their lives to purchase life insurance.

When asked, “When is the best time to buy a life insurance policy?” Over 37% of individuals replied, “While you’re young and healthy.”

What are your views on when potential policyholders should buy life insurance?

Life event
Gen. Z
Millennial
Gen. X
Baby boomer
Silent gen.
After the birth of a first child20%16%20%11%16%
Once you are married18%16%15%17%0%
While you are young and healthy27%35%36%42%47%
After buying your first home8%10%4%4%11 %
When you reach retirement age7%6%7%8%5%
When you get your first full-time job or promotion8%11%11%6%11%
Never10%4%4%8%11%

Frequently asked questions

Is life insurance worth the cost?

The answer depends on the family situation of most people. For those who are the sole or primary breadwinners of their household, life insurance is essential. In the event of an emergency, it will be hard for your family members to replace the income you earn.

What is the cost of life insurance for a family with four members?

Based on a life insurance policy that lasts 20 years with a death benefit of 500,000., we found that life insurance costs an average of $126 per month. This number should be considered a guideline. Your rates for life insurance can change depending on your age, your choice of insurer, and what coverage you need.

At what age should I start life insurance?

The cost of life insurance goes up with age, so it is best to get it as soon you can. Most people get coverage when they marry or have children. However, coverage is also necessary for situations where someone will depend on you financially.

How much life insurance should you buy?

Your financial situation will determine how much life insurance you should purchase. It is important to find out what your beneficiaries will need in case of your death.

This could include expenses related to your death, final expenses, funeral expenses, expenses incurred by your family for providing income, as well as your debts.

Once you have an idea of how much you wish to leave to your family members, you can start shopping around for the best rates.

What taxes do you have to pay on life insurance?

This will depend on your specific life insurance policy. On a death benefit from your life insurance policy, you are not required to pay income taxes.

The cash value of a cash-value policy grows tax-deferred and any loan that you take is exempt from tax. You will only pay income tax on a cash-value life insurance policy if you cash it out completely or have more money than you put in during the policy’s term.

The interest earned would be considered income and would become taxable. It’s possible that estate taxes may also be due, depending on how large your estate is and what state you live in.

How do I buy life insurance?

You can usually start the process by visiting a few companies’ websites to get life insurance quotes. You can buy insurance online from some companies, while others will require you to visit an agent to complete the transaction.

The company may require you to complete a medical questionnaire to get more information about your health. They may also request a medical exam to evaluate your current health. Some policies may be eligible for same-day coverage, but it’s possible.

However, you should allow yourself several weeks to go through the underwriting process. Many people also have access to free or reduced life insurance through their employers’ group plans. Talk to your HR representative about this possibility.

Leave a Reply

Your email address will not be published.