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 |
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:
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