Average Cost of Life Insurance May Surprise You
Life insurance can cost $200 - $7,000 per year, depending on factors like your age, health, and policy size. Read on to see what you can expect to pay for life insurance.
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| © Matt Burns (CC BY-SA 2.0) via Flickr |
Read this shocking study to learn more about the life insurance industry.
- Average Cost of Term Life Insurance
- Average Cost of Whole Life Insurance
- Average Cost for a Family of 4
- Smoker Vs. Non-Smoker Rates
Average Cost of Term Life Insurance
On average, Americans spend $2,037 per year on term life insurance. This average is for non-smokers between the ages of 20-65 with a $500,000 policy. Smokers pay a higher rate, with an average of $7,313 per year for term life insurance. This comes out to around $609 per month.
The older you get, the more expensive your life insurance rates. It's always best to secure life insurance at a younger age to keep your premiums lower.
Average Cost for 10 Year Term Insurance
10-Year Term Rates - Male
| Age | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
| 20 | $9.41 | $12.50 | $16.26 | $24.58 |
| 30 | $9.45 | $12.50 | $16.26 | $24.58 |
| 40 | $10.75 | $15.30 | $21.75 | $38.80 |
| 50 | $17.87 | $26.72 | $44.83 | $77.17 |
| 60 | $36.14 | $65.82 | $117.32 | $221.04 |
10-Year Term Rates - Female
| Age | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
| 20 | $8.04 | $9.62 | $12.94 | $20.48 |
| 30 | $8.10 | $10.34 | $12.94 | $20.48 |
| 40 | $9.93 | $13.35 | $16.93 | $27.15 |
| 50 | $15.87 | $21.87 | $37.08 | $66.73 |
| 60 | $27.47 | $46.94 | $81.13 | $148.12 |
Average Cost for 15 Year Term Insurance
15-Year Term Rates - Male
| Age | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
| 20 | $9.50 | $13.14 | $18.14 | $29.45 |
| 30 | $9.50 | $13.14 | $18.14 | $30.45 |
| 40 | $11.30 | $16.85 | $25.67 | $42.11 |
| 50 | $21.07 | $35.31 | $63.62 | $110.27 |
| 60 | $47.63 | $101.29 | $186.29 | $299.02 |
15-Year Term Rates - Female
| Age | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
| 20 | $8.51 | $10.65 | $14.66 | $25.10 |
| 30 | $8.51 | $11.68 | $14.66 | $25.10 |
| 40 | $10.75 | $14.79 | $22.46 | $34.37 |
| 50 | $17.33 | $27.35 | $49.08 | $81.39 |
| 60 | $32.31 | $62.28 | $121.24 | $210.84 |
Average Cost for 20 Year Term Insurance
20-Year Term Rates - Male
| Age | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
| 20 | $9.92 | $13.57 | $20.88 | $34.67 |
| 30 | $9.92 | $14.57 | $20.88 | $35.67 |
| 40 | $12.67 | $19.67 | $34.92 | $56.90 |
| 50 | $24.63 | $47.68 | $92.06 | $145.55 |
| 60 | $64.34 | $132.70 | $266.85 | $419.38 |
20-Year Term Rates - Female
| Age | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
| 20 | $9.05 | $12.09 | $18.71 | $30.19 |
| 30 | $9.14 | $13.31 | $19.14 | $32.06 |
| 40 | $12.12 | $17.99 | $27.67 | $46.72 |
| 50 | $20.16 | $34.46 | $63.87 | $109.36 |
| 60 | $42.26 | $89.37 | $165.03 | $298.02 |
Average Cost for 25 Year Term Insurance
25-Year Term Rates - Male
| Age | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
| 20 | $11.18 | $16.42 | $27.08 | $47.75 |
| 30 | $17.78 | $16.83 | $28.41 | $49.25 |
| 40 | $16.89 | $24.92 | $45.08 | $81.08 |
| 50 | $33.80 | $57.67 | $110.75 | $194.83 |
| 60 | $98.87 | $101.58 | $382.83 | $712.16 |
25-Year Term Rates - Female
| Age | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
| 20 | $10.32 | $13.75 | $22.16 | $38.17 |
| 30 | $10.94 | $14.25 | $23.42 | $39.81 |
| 40 | $14.52 | $21.00 | $37.91 | $67.74 |
| 50 | $26.42 | $43.75 | $81.67 | $161.08 |
| 60 | $72.89 | $84.25 | $292.42 | $494.26 |
Average Cost for 30 Year Term Insurance
30-Year Term Rates - Male
| Age | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
| 20 | $12.96 | $20.53 | $33.06 | $55.00 |
| 30 | $13.31 | $21.62 | $34.28 | $61.77 |
| 40 | $20.52 | $31.18 | $55.26 | $103.53 |
| 50 | $39.78 | $74.94 | $138.99 | $258.39 |
30-Year Term Rates - Female
| Age | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
| 20 | $11.92 | $18.49 | $26.97 | $46.72 |
| 30 | $12.88 | $19.45 | $28.62 | $51.03 |
| 40 | $18.15 | $27.61 | $45.51 | $83.09 |
| 50 | $31.94 | $59.64 | $102.66 | $194.95 |
Once you hit 60 years old, you're generally not allowed to purchase 30-year term life insurance anymore. You can usually still purchase 25-year term up to the age of 65, and 20-year term after that.
Average Cost of Whole Life Insurance?
Whole life insurance rates are on average $250 more than term insurance rates. The average monthly cost for whole life insurance is $419 for a non-smoker. Smokers pay an average of $859 per month.
Here's a more detailed breakdown of average whole life insurance costs by age (for non-smokers).
| Age | Men | Women |
|---|---|---|
| 25 | $177.70 | $155.73 |
| 30 | $200.25 | $179.16 |
| 35 | $260.57 | $218.59 |
| 40 | $327.99 | $263.61 |
| 45 | $415.86 | $328.86 |
| 50 | $530.92 | $420.86 |
| 55 | $677.73 | $543.97 |
Average Life Insurance Cost for a Family of 4
A 20-year, $250,000 term life insurance policy for a family of 4 with no health issues costs an average of $470 per year. This average is based on the best rates possible. It assumes the adults have not smoked within the last 3 years.
Smoker vs. Non-Smoker Life Insurance Costs
On average, smokers can expect their rates to be 250% higher than rates for non-smokers. The average cost of a 20-year, $500,000 term life insurance policy for a male smoker is $707 per month. The average cost for the same policy for a female smoker is $511 per month.
Typically, you are not considered a non-smoker until you are nicotine-free for at least 12 months. This varies by insurance company. Some require a longer waiting period than others do.
Factors That Affect Life Insurance Costs
- Age: The top reason life insurance rates vary is age. The older you are, the more expensive you are to insure.
- Gender: Women generally pay lower rates than men, because women have longer life expectancy (86.6 years vs men's 84.3 years). On average, men pay 38% more for term life insurance than women.
- Occupation: The more dangerous your job, the higher your premium, no matter your gender.
- Health: If you have high cholesterol or blood pressure, expect to pay as much as 50% more than regular rates for life insurance. However, if you manage your condition with medication, you can still keep rates lower.
- Hobbies: Got pastimes like motorcycle racing or skiing? Those with more high-risk hobbies will face higher premiums.
- Policy size: The bigger coverage you get, the higher your premium. Find out how much life insurance you need.
Reasons to Get Life Insurance
Some reasons to get life insurance include:
- Replace your income so your family can maintain the same standard of living
- Pay off your debts so your family isn't burdened with them
- Pay for child care services
- Pay for your children's education
- Pay for final burial expenses
- Transfer business ownership
- Pay off estate taxes
Bottom Line
Life insurance can protect you and your family. But it can get costly. Try minimizing your risk factors before applying. Getting insurance at a young age can help too. You need to find the perfect balance between protecting your family and spending too much money on coverage.
Sources and References:
Disclaimer: Opinions expressed here are author's alone. Please support CreditDonkey on our mission to help you make savvy decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.
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