Life insurance costs depend on several factors, including age, gender, health, the type of insurance you get, and the size of the policy. Term and whole life are the two most popular types of life insurance, and term is the most affordable. Typical term life insurance rates range from about $8.79 to $53.55 per month.
To find the best policy at the best price, you’ll want to get quotes from a number of companies. PolicyGenius makes that easy for you because through their website, you can get quotes from over a dozen companies in a matter of a few minutes. There’s no obligation and it’s completely free to use.
Average Life Insurance Costs
Average term life insurance costs range from $8.79 to $53.55 per month for healthy non-smokers in their mid-twenties, depending on the term of the policy and the death benefit. On the other hand, policyholders in their mid-forties can generally expect to pay premiums ranging from $16.56 to $170.28 per month.
The cost of life insurance will depend on a number of factors. Some factors are related to demographics, including your age, sex, and health. Other cost factors are related to the type, size, and term of your life insurance policy. We show estimated monthly term life insurance rates in the table below.
Premium rates for whole life insurance, variable life insurance, and universal life insurance were not included in our table because they have less standard pricing. Life insurance costs for these policies are more difficult to price than term insurance because of various factors, such as cash value, dividends, and interest rates unique to permanent insurance types.
Use the tables below to get average life insurance costs for a term life policy:
Estimated Monthly Term Life Insurance Costs
|25 Female||25 Male||35 Female||35 Male||45 Female||45 Male||65 Female||65 Male|
|10 Years $250K||$8.79||$9.62||$9.84||$11.38||$16.56||$19.78||$92.75||$144.16|
|10 Years $500K||$12.41||$14.07||$13.78||$15.09||$25.80||$32.25||$127.44||$205.14|
|10 Years $1MM||$18.83||$21.28||$20.34||$22.97||$46.44||$58.48||$237.13||$386.58|
|20 Years $250K||$11.78||$12.98||$13.34||$14.88||$24.94||$30.32||$167.78||$222.25|
|20 Years $500K||$11.52||$20.29||$20.34||$23.41||$42.14||$52.89||$270.07||$406.35|
|20 Years $1MM||$28.62||$34.98||$33.47||$40.47||$76.54||$97.18||$512.05||$795.29|
|30 Years $250K||$16.11||$19.42||$21.00||$24.50||$40.21||$48.81||N/A||N/A|
|30 Years $500K||$26.12||$32.09||$34.78||$41.34||$73.10||$89.87||N/A||N/A|
|30 Years $1MM||$43.11||$53.55||$62.34||$74.59||$137.60||$170.28||N/A||N/A|
Updated: August, 2018
Average monthly premiums for term life insurance are provided by PolicyGenius. They are sourced from multiple life insurance providers, including Protective, Mutual of Omaha, Transamerica, and Lincoln. All figures assume a healthy, non-smoking policyholder.
Factors That Impact Life Insurance Rates
When you purchase a life insurance policy, you pay premiums to the insurance company in exchange for a death benefit, which will be paid out when you die. Since life insurance pays a benefit at the time of your death, premiums are based on the risk of you dying prematurely or before the end of a term with term life insurance.
There are two types of risk factors affecting term life insurance rates:
- Personal Risk Factors: Things like age and gender or any factor that holds the potential for you to die early is considered a risk factor. You can have several risk factors or none at all. The insurance company sets a certain dollar value on each risk, which is added to your premium.
- Size, Term, & Type of Policy: How much an insurance policy must pay out when you die, how long they must commit to paying that amount out, and what other benefits may come with your policy will impact the cost of life insurance.
Personal Risk Factors Affecting Life Insurance Costs
The cost of life insurance is impacted by a number of personal risk factors, including age, gender, and if you are a smoker or not. Life insurance companies will review your personal risk factors before pricing your insurance policy.
The nine most common risk factors that could increase your life insurance costs are:
- Age: The older you are, the more expensive life insurance is.
- Gender: Males tend to be charged higher rates.
- Smoker/Non-smoker: Smoking will typically raise your rates.
- Personal Health Conditions: Poor health creates risk to the insurer, raising your rates.
- Personal Health History: Past health problems could be a sign of future health risks.
- Family Health History: Your future risks also increase with poor family health history.
- Occupation: Some jobs have a high hazard risk, which could increase your costs.
- Hobbies & Travel: A history of risky activities could also increase your costs.
- Lifestyle: A pattern of risky activity could impact your costs long term.
How Age Affects Life Insurance Costs
The younger that you are, the longer you’re likely to live. That lowers the risk of an early payout for the insurance company. The older you are when you apply for a life insurance policy, the more expensive the premium will be. You should also note that the premium spread between female and male tends to increase with age.
How Gender Affects Life Insurance Costs
Gender plays a significant role in life insurance premium costs. Generally speaking, rates for women are less expensive than they are for men, since women tend to live longer. The average life expectancy at birth for a woman is 81.3, while for men it’s 76.3. The longer the insured lives, the longer the policy is in force, and the more premiums the insurance company collects. That allows them to charge a lower premium.
How Smoking Affects Life Insurance Costs
Smoking is one of the biggest factors that makes life insurance premiums more expensive. For example, a male smoker in his 30s can expect to pay about two to three times as much for a policy than a non-smoker. Also, it usually takes two or more years after you quit for an insurance provider to consider you a non-smoker or former smoker.
How Health Conditions Affect Life Insurance Costs
Health conditions are ongoing health concerns such as hypertension, high cholesterol, obesity, and diabetes. The presence (and combinations) of these health conditions are personal risk factors that will increase the cost of life insurance.
How Personal Health History Affects Life Insurance Costs
Health history refers to those conditions that you’ve dealt with in the past but aren’t current issues, such as cancer, heart disease, stroke, and depression. How much time has elapsed since the health event will play a large role in how the insurance company will weigh the risk and adjust your life insurance premiums accordingly.
How Family Health History Affects Life Insurance Costs
Insurance companies also consider your family (blood relatives, typically limited to parents and siblings) health history. Insurance companies are generally most concerned with the existence of health conditions that resulted in the death a family member before they reached the age of 60.
How Occupation Affects Life Insurance Costs
Occupation can play a role in determining your premium, but usually only if you’re working in a field that is considered to be particularly hazardous or extremely stressful. Some of the most hazardous jobs that could affect your premium include aircraft pilot, roofer, truck driver and construction worker.
How Hobbies & Travel Affects Life Insurance Costs
In most cases, your hobbies and travel will not have an impact on the cost of your life insurance. However, the more adventurous among us might see higher costs. Your cost of life insurance will increase if you participate in extreme hobbies that have a high rate of accidental death. Similarly, if you travel regularly to countries that are considered dangerous, you can expect higher life insurance costs.
How Lifestyle Affects Life Insurance Costs
Other personal risk factors that can impact the cost of life insurance include lifestyle and related factors. For example, riding motorcycles or mountain climbing will increase your premium. Also your credit history, driving history (especially a DUI within the past five years), and having a criminal record will increase life insurance premiums.
PolicyGenius notes a criminal history can increase your premium by around $2.50 per $1,000 of coverage, which would result in an additional $250 per year on a policy with $100,000 in coverage. They further note that “no life insurance company will accept an application from someone who is in jail, awaiting trial, or is currently on probation.”
Other Factors Affecting Life Insurance Costs
In addition to the personal risk factors that impact the cost of life insurance, other factors, such as the size, term, and type of life insurance policy you purchase, will play a large role in the cost of your premium. We’ll take a close look at each below.
How Size of Death Benefit Affects Life Insurance Costs
As you might expect, the larger the death benefit on your policy, the higher the premium will be. However, the rate of increase declines with higher rates. For example, the monthly premium for a $250,000 policy for a 25-year-old female is $8.79. However, the premium for the same individual on a $1 million policy is $218.94. Though the death benefit of the policy is four times larger at $1 million, the premium cost is only slightly more than two times.
How Length of Term Affects Life Insurance Costs
Much of the cost specific to term life also depends upon the length of the term. The longer the term, the more expensive the premium will be. For example, the cost for a $500,000 term policy for a healthy 25-year-old female may be $144.43 per year for a 10-year term policy, but it will be $303.73 per year for the same amount of coverage under a 30-year term policy.
The reason for this difference is that the longer the term of the policy, the greater the likelihood that the insurance company will have to pay out within that term. In addition, a longer-term policy must also cover higher age brackets. For example, the same 30-year term policy that you take at age 30 will be in force when you are 50 and considered to be a higher risk.
Types of Life Insurance
Life insurance can be either temporary or permanent. For example, term life insurance is temporary because it covers a specified term, such as 10, 20, or 30 years. Permanent life insurance, such as whole life, variable life, and variable universal life, remain in force for your entire life, as long as premiums are paid.
Life insurance policies come in three primary types:
- Term Life Insurance
- Whole Life Insurance
- Variable & Universal Life Insurance
Term life insurance provides coverage that is in force for a specific number of years. For example, if you take a 10-year term life policy, no death benefit will be paid if you die after the term expires. The typical terms of term life are 10, 15, 20, 25, and 30 years. These policies are often referred to as “level term” because both the death benefit and the premium remain level throughout the term.
Term life insurance’s only benefit is the death benefit. Unlike other types of life insurance, term life has no investment provision. For that reason, it is by far the lowest cost type of life insurance coverage you can buy.
Whole life insurance not only provides a death benefit, but also has an investment component. The investment portion of the policy earns dividends that accumulate in the plan on a tax-deferred basis. That’s what’s called a cash value, and policyholders can draw or borrow against the cash value of their policy
Whole life is sometimes referred to as permanent life insurance because it can be kept in force for your entire life, rather than a set number of years.
Because whole life insurance lasts your entire life and has an investment component, it is more expensive than term life insurance. Whole life insurance starts at three to four times the cost of term life insurance, but can easily run 10 to 15 times the cost.
Variable life insurance is similar to whole life insurance but with more flexibility. Variable life insurance offers permanent coverage and has an investment provision. However, the cost of your policy can be impacted by the performance of your investment, both positively and negatively.
4. Universal Life Insurance
Universal life insurance also offers permanent coverage but the death benefit, the cash value/investment provision, and the premiums can be reviewed and adjusted to fit the policy owner’s circumstances in the future.
Regardless of the type of insurance that’s right for you, it’s important to shop around before buying a policy. With a company like PolicyGenius, you can fill out a few questions online and within minutes get quotes from over a dozen leading insurance companies. There’s no obligation to buy and it’s free to use.
Life Insurance Costs for Small Business Owners
In general, small business owners do not pay more for life insurance than non-business owners. However, small business owners might need several life insurance policies, or a policy with a much larger death benefit, to cover business obligations in the event of their death. Key man insurance for small business owners typically costs from $100 to $2,000 per year, on average.
For example, it’s common for the buy/sell agreement between co-owners of a small business to have very specific life insurance requirements for each partner. Key man life insurance can also be an important part of ensuring your business continues to operate if you pass unexpectedly, and is even required for some SBA loans.
But beyond specific business life insurance policies, it’s also important to maintain adequate life insurance for the benefit of your family, for all of the same reasons that you would have a policy in the normal course of your life.
As Jennifer Fitzgerald, CEO of PolicyGenius, said:
“It’s important to understand that key person insurance is not a substitute for personal life insurance. While key person insurance can help cover the costs of locating and securing external governance, replacing lost revenues, or executing the terms of a buy-sell agreement, it will not be covering your family’s needs. For that, a small business owner will still need personal life insurance.”
Frequently Asked Questions (FAQs) About Life Insurance Costs
Below are some of the most frequently asked questions about life insurance costs. If you can’t find the question you want the answer to, you can head over to our forum and ask your question there, where we’d be happy to find the answer for you.
How do I find the best rates for life insurance?
Once you have an idea of the coverage amount you need for life insurance, it’s wise to get at least three quotes from different insurance providers. This way, you can shop the best rates and compare coverage at various companies. Online insurance providers can be an easy way for many people to find a low-cost life insurance policy.
According to Emily Johnson, Head of Product, Fabric:
“If you’d rather not go through an agent or spend time on the phone or in person, you can now buy competitive term insurance policies without going through an agent through several companies with an online presence. Just check to make sure that the company you use is backed by an insurer with a solid rating from A.M. Best.”
Do group life insurance policies have lower rates than other policies?
Group life insurance rates are not always lower than the same policy purchased through an insurance provider. If you are offered a group life insurance policy through your employer, it’s still important to shop rates at other insurance companies.
According to Byron Ellis, Certified Financial Planner, United Capital Financial Life Management:
“Most group plans are priced in age bands. Typically, every five years or so the cost goes up. This makes it look appealing when you first sign up, but the policy could end up costing you more over 10 or more years. For example, if you are 30 years old, you will most likely keep your coverage for 20 years or longer. You may find that a 20-year policy will end up being cheaper than your group coverage.”
Is a medical exam required to get life insurance?
Not all insurance companies require a medical exam to get life insurance. For example, a low death benefit, such as $50,000, on a group life insurance policy through your employer will not require a medical exam. However, most insurance companies generally require certain medical exams, in addition to completing an application, for life insurance.
According to Margaret M. Koosa, CEO, The Alchemists, Your Wealth Concierge:
“Most underwriters require a medical exam of some sort, which may include height, weight, blood and urine samples, and other tests, depending on the age of the proposed insured. They will also review one’s personal medical history and request records from any physicians they have consulted. In addition, the health, longevity of one’s parents and siblings, and, if applicable, cause of death may be considered.”
Life insurance costs are cheaper the younger and healthier you are, the shorter the policy’s term, and the lower the death benefit. As you age, buying life insurance will become more expensive. Personal risk factors can contribute to higher life insurance costs, as can the size of benefits and term length of your policy.
To get the best life insurance policy to fit your needs, we recommend shopping around and getting rates from multiple insurance carriers. If you’re ready to get quotes from more than a dozen of the top insurance companies, get started with PolicyGenius, where you can get access to these quotes online in a matter of minutes.