Updated November 7, 2019

How Much Does Life Insurance Cost?

Read more about Life Insurance

What is the average cost of life insurance? And how can you be sure you're getting a good deal? Read on for sample term and whole life insurance rates by age.

Average Cost of Life Insurance

The average cost of life insurance will depend on a variety of factors. Among the most important factors are the age of the policyholder and the type of policy they buy.

Generally speaking, you'll pay a smaller monthly premium if you are younger, healthier, and opting for a term life policy.

What is the average cost of life insurance?
Life insurance costs an average of $28.19 per month for a $250,000 20-year term policy. This assumes you are a healthy, non-smoking person between 20 and 50. However, averages can often be misleading. Your actual rates depend on age, health, lifestyle, and type of policy. Read on to learn how to get a good price and avoid common life insurance traps.

Annual Life Insurance Rates by Age

As previously mentioned, age is among the most important factors in determining what you pay for a life insurance policy.

Below, we cover what healthy, non-smoking men and women of varying ages can expect to pay for $250,000 in coverage for different policies.

Term Life Policies - Men

Age20-Year30-YearNo Exam 10-Year
25$14.55$18.92$12.71
30$14.57$21.62$13.83
35$15.65$21.63$13.96
40$20.85$28.29$17.71
45$30.96$38.71$21.87
50$46.30$66.63$23.65
55$72.32$165.00$38.06

Term Life Policies - Women

Age20-Year30-YearNo Exam 10-Year
25$12.73$15.58$9.58
30$13.31$16.26$11.51
35$13.99$17.46$12.71
40$18.23$24.33$15.21
45$30.96$32.04$18.12
50$35.82$49.96$20.43
55$54.42$116.00$29.53

Whole Life Policies - Men & Women

AgeMenWomen
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

What age should you get life insurance?
Generally speaking, you should get life insurance as early as possible. The younger and healthier you are, the less expensive your premiums will be. The ideal age to get life insurance is around 25 years old.

Cost of Term Life vs Whole Life

The price difference between term life and whole life is about $250 a month, though that gap will shrink as you age.

With term life insurance, the cost advantage only occurs if you purchase a policy before age 35.

Should I get term or whole life insurance?
The best policy for you will depend on your specific needs and preferences. Generally speaking, term insurance is best if you only need coverage for a specific time.

Whole life insurance is best If you need coverage for the rest of your life and require an investment vehicle.

Average Cost of a 100K Policy

What you pay for $100K in life insurance coverage will depend on your age, gender, and overall health, among other factors.

Below we cover what a healthy 20-50-year-old can expect to pay for a $100K policy.

Age20 yr. Term30 yr. TermWhole
20$12.44$9.48$46.87
30$13.09$9.53$73.99
40$19.33$12.39$111.10
50$35.86$22.39$167.63


Average Cost of a 500K Policy

As you might expect, a higher coverage amount will be reflected in the price of your monthly premiums. Review average rates for a $500K policy below.

Age20 yr. Term30 yr. TermWhole
20$19.79$30.01$210.75
30$20.01$31.45$296.36
40$31.29$50.38$444.12
50$77.96$120.82$798.37

Cost of Life Insurance for Seniors

Age-related risks translate into higher costs for life insurance. How much higher? Take a look at examples of monthly premiums for seniors at varying ages:

Age $100k 10 yr. Term$100k Universal$50k Final Expense
60$33.49$142.58$147.42
70$86.79$239.42$235.81
80$265.73$432.75$493.94

There may be reasons you want to skip a medical exam when applying for life insurance.

While a no-exam policy may be faster and easier to obtain, it won't always offer the coverage your family may need.

The cost of insurance greatly depends on the type of policy. Term life insurance is typically cheaper than whole life insurance. The rate class factors discussed below apply to both types.

What Are the Underwriting Guidelines?

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Life insurance companies have algorithms that show common trends among people in various lifestyle categories. They separate these trends into rate classes to determine your risk and policy cost.

Keep reading to learn more about the main factors that affect life insurance rates.

Age

The younger you are, the less you will pay for life insurance.

After age 40, life insurance rates increase by 5-8% every year.

After age 50, life insurance rates increase by 9-12% every year.

Older people may undergo additional tests, such as an EKG or a cognitive screening as part of their underwriting process.

Gender

Life insurance rates for women are lower because data shows that women generally live longer. Here's how the cost of a $250k term life policy can differ by gender:

A 45-year-old male might pay $16.93 a month for coverage.

A 45-year-old female might pay $15.25 a month for coverage.

A similar rate difference occurs with whole life insurance policies.

Health

Most life insurance companies require a medical exam as part of the application for insurance.

During the exam, a medical professional will likely check or collect your height, weight, blood pressure, blood sample, and urine sample.

Diseases like cancer, diabetes, or HIV won't necessarily disqualify you from coverage. Though they may raise your rates depending on factors like:

  • When the condition was diagnosed
  • Severity of the condition
  • Stability of the condition
  • Method of treatment

Tobacco Use

Smokers fall into a high-risk rate category, which means a higher premium.

If you quit smoking after your life insurance policy has been issued, ask your insurer to re-evaluate your policy's rate.

It could decrease your premiums by as much as 25%.

Lifestyle

If you have a dangerous occupation or risky hobbies, you will pay more for life insurance.

Occupations considered high risk can include:

  • Commercial fisherman
  • Roofer
  • Electric power line installer or repairer
  • Logger
  • Refuse and recyclable collector
  • Construction worker
  • Airline pilot or flight engineer
  • Truck driver
  • Farmer
  • Miner

Common activities considered risky can include:

  • Bungee jumping
  • Rock climbing
  • Riding a motorcycle
  • Hunting
  • Recreational boating and fishing
  • Scuba diving
  • Skydiving or BASE jumping
  • Hang-gliding
  • Snowboarding

Note: Insurance companies can lower coverage or deny claims if you don't disclose your risky activities when applying for life insurance. There's no point in paying for life insurance if you're going to lie or not provide all of the necessary information.

How to Get Cheap Life Insurance

  1. Buy life insurance early.
    Between the ages of 18 and 30 are when the cost of insurance is the lowest, whether you buy term or whole life insurance.

  2. Check rates of different insurance companies.
    The underwriting process differs from insurer to insurer. Not all of them apply the same level of risk to certain health issues.

  3. Buy a term that will carry into later life.
    Term life rates increase with age. The younger you are, the less you pay. The maximum for most term life policies is 30 years.

  4. If you're a smoker, quit.
    By giving up cigarettes, tobacco or marijuana products, you'll reduce your life insurance cost by at least 25%.

  5. Take measures to improve your health.
    Maintain a healthy lifestyle to lower your monthly premiums. Take efforts to manage your weight, cholesterol, or blood pressure.

  6. Pay your premiums yearly instead of monthly.
    It may be easier to pay monthly, but it'll cost you in the long run. Most insurers charge a fee to process monthly payments.

Which is a better value, term or whole life?
Weighing the short-term cost advantage of term insurance with the long-term benefits of whole life comes down to personal preference.

If you only want death benefits and have the discipline to save on your own, a term life policy might be a good fit. If you want a policy that provides both, then whole life insurance is worth looking into.

Best Life Insurance Companies

The best life insurance companies provide affordable coverage with great customer service, understandable terms, and a variety of riders and coverage options.

Below we outline a few life insurance companies that hit that mark. When shopping for coverage, be sure to seek quotes from multiple companies to find the best deal.

Best for No-Exam Coverage - Haven Life
Haven Life is owned and underwritten by MassMutual. They only offer term life policies and their application process takes place online.

Depending on your health info, you may qualify for their InstantTerm product. If so, no medical exam is required, and your coverage can begin immediately.

A.M. Best rating: A++

Best for Seniors - State Farm
Unlike many insurance companies, State Farm provides several options for seniors. Their Select Term product provides a 10- or 2—year policy for those between 45 and 65, while those over 75 can get a 10-year term.

Rates are level for the entire initial term, and the policy can be renewed annually up until the age 95. Keep in mind that, if you choose to renew, your rates will increase.

A.M. Best rating: A++

Best for Competitive Rates - Protective
Protective, a subsidiary of Dai-ichi Life Holdings, Inc., insures over 8 million people and has over $862B in financial strength.

They offer a variety of policy options, including the Protective Classic Choice Term policy, with rates up to 49% less than their competitors.

A.M. Best rating: A+

Best for Dividend Payments - MassMutual
Many whole life insurance companies pay regular dividends to their policyholders. Among these, MassMutual is a top choice for consistently high dividend payments.

MassMutual has offered consistent dividends to its policyholders since the 19th century, often 1-2 percentage points higher than other mutual life insurance companies.

A.M. Best rating: A++

Bottom Line

Life insurance costs are based on many risk factors, with two big ones being your age and health.

However, you can take action to lower your risk factors and ensure you receive the lowest life insurance rate.

To find the best life insurance rate, do extensive research and get plenty of quotes to compare. This way, you can make an educated decision on the best coverage for you.

More from CreditDonkey:


Types of Life Insurance


What is Life Insurance


Life Insurance Policy

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