How much does life insurance cost?

Knowing the answer to “how much does life insurance cost” can help you budget for life insurance. Life insurance ensures your loved ones are taken care of financially after you pass, but it can be an expensive purchase to make. 

However, since the average cost of life insurance varies drastically from person to person, comparing quotes based on your health, age, and other relevant factors affecting your life insurance rates is important.

Since life insurance is such an important purchase, we want to ensure you understand life insurance factors and whole life and term life insurance quotes fully. Continue reading to learn more about the cost of life insurance, how rates get calculated, tips on saving, and other important information.

Cost of Life Insurance 

How much is life insurance? Life insurance isn’t cheap, with monthly costs ranging from less than $11 to a few hundred dollars. Life insurance premiums depend on age, health, chosen policy, insurance company, and more.

To show you how much rates can change based on various factors, we’ve outlined rates in the next few sections to show you the average costs of whole life insurance policies, term life insurance policies, and more.

Whole Life Insurance Average Cost

According to the Insurance Information Institute, a whole life insurance policy is a simple form of permanent life insurance, meaning it lasts for your life if you pay your premiums. Depending on the type of whole life insurance policy you pick, you may be able to withdraw funds or take out loans if you have cash value savings included in your policy.

Whole Life Insurance Monthly Rates by Age, Gender, & Coverage Level

Read more:

• How much does a $100,000 life insurance policy cost?
• What Does a $500,000 Life Insurance Policy Cost?
• How much does a million dollar life insurance policy cost?

Buying a policy in your younger years is often more manageable than after retirement, as older seniors pay thousands of dollars more for life insurance policies. However, life insurance for seniors can be expensive compared to purchasing a policy in your 30s.

In addition, you may notice that men tend to pay higher insurance rates than women, as women’s average life expectancy is longer than men’s. So men will have to budget a little more than women for whole life insurance policy payments.

Term Life Insurance Average Cost

Term life insurance policies differ from permanent life insurance policies because they don’t last the duration of the insured’s life. Instead, you choose how long your term life insurance policy lasts, such as 10 or 20 years. Take a look at the table below to compare average 20-year term life insurance rates by age and gender:

Term Life Insurance Monthly Rate By Age & Gender

If you don’t pass away before the term life insurance policy ends, you can renew your policy. You won’t receive refunds unless you have a return of premium life insurance policy.

Since term life insurance is only for a set period, the term life insurance cost is cheaper than permanent life insurance policies. Term life insurance rates are much less than whole life insurance rates by hundreds or thousands of dollars in each age bracket. In addition, the younger you purchase a term life insurance policy, the less you’ll pay.

It may seem odd to purchase a term life insurance policy in your 30s, but some people may purchase a policy until major financial obligations are out of the way. For example, you can purchase a term life policy to last until the mortgage gets paid off.

Average Cost of Term Life Insurance by Health Condition 

While term life insurance is a popular option because it’s cheaper than whole life, the cost of a policy can vary greatly depending on an insured’s health condition. You can get life insurance with a medical condition, but you may have to pay more for the policy. 

Insurance companies will generally assign a risk rating of super preferred, preferred, and standard, with those super preferred being people in great health.

If you’re in good health, you could pay hundreds or thousands of dollars less than those in poor health, depending on your age bracket. Smoking, high blood pressure, high cholesterol, and similar health issues affect your health score at a life insurance company. 

Average Cost of Term Life Insurance by Term Length 

If you purchase term life insurance, the term length you choose for your policy affects your rates. Common term lengths for term life insurance are 10, 20, and 30 years. Shorter-term lengths cost less than longer-term lengths. Compare term life insurance rates by term length in this table:

Term Life Insurance Average Monthly Rates by Policy Length

On average, a 10-year term length will cost a few hundred dollars less than a 30-year term. Your rates may be cheaper or more expensive than the average, depending on your age and health status. To learn more, read this article about 35-year term life insurance.  

Average Life Insurance Cost Without Medical Exam 

Your health is one of the most important factors when insurance companies calculate life insurance rates, so most insurers require a medical history and medical exam before issuing a policy and rates. 

No-medical exam life insurance policies are typically more expensive than policies requiring an exam because insurers take on a risk when insuring people without a complete picture of their health, so they upcharge on rates. See a no-medical exam life insurance cost breakdown in the table below:

Monthly Rates for No-Medical Exam Life Insurance on $250,000 and $500,000 Policies

Insurers usually sell no-exam policies as guaranteed issue life policies, meaning everyone gets accepted.

No-exam life insurance policies cost more, but guaranteed issue policies can be good policies for those with poorer health who may struggle to find a good life insurance policy.

Average Life Insurance Cost by Company 

Besides health and choice of policy, another major factor affecting how much you pay for life insurance is your choice of company. While the average rates may only differ by less than a hundred dollars between companies, these small amounts can add up over the decades you pay your premiums.

Find the best life insurance prices by comparing average rates by company in the table below:

Life Insurance Monthly Rates & A.M. Best Ratings by Provider

Some of the companies also sell other insurance types, meaning you may be able to earn a bundling discount by purchasing life insurance and another policy from these companies. 

When considering a life insurance policy, you should consider a company’s reputation and average costs. You should also check a company’s consumer ratings, financial ratings, and other important factors or read more about the best life insurance companies.

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Factors Affecting Life Insurance Costs

Now that we’ve covered how life insurance rates vary, it’s important to understand how they get calculated. All life insurance companies use the same basic factors to determine rates, such as age, gender, occupation, and other factors. Continue reading to learn about each factor.

Age

The younger you are, the less you’ll pay in life insurance premiums because the likelihood of an insurance company paying out a death benefit soon after purchasing a policy is less than an older person purchasing life insurance. For example, life insurance for 30-year olds is cheaper than for older adults.

In addition, the sooner you purchase a life insurance policy, the less you’ll pay. Insurance companies charge higher rates for older seniors to offset the fewer years they’ll receive premiums before paying a death benefit.

Credit Score 

Unlike other factors on this list, credit score doesn’t relate to health status. However, it relates to the risk that insurance companies take by insuring you. People with poor credit scores may have to pay slightly more than those with excellent credit scores.

Why? Life insurance companies view those with poor credit scores as more likely to skip payments, which can be a hassle for the company.

Chosen Insurance Policy 

The insurance policy type and add-ons, like a child rider, affect how much you’ll pay for a policy. As shown in the average rates, term life insurance policies tend to be the cheapest since they only last for a decade or two and don’t build up cash values.

Permanent life insurance costs more than term life insurance policies, as they last the duration of an insured’s life and typically have cash value. The cash value is useful if you want to withdraw funds from your policy. We recommend researching the different types of term life insurance and whole life insurance policies to see which is best for you. You can read more about term vs. whole life insurance in this article. 

In addition to the policy type, your payout amount affects your premiums. Your life insurance rates will be much higher if you choose a $1,000,000 policy compared to a $500,000 policy. We recommend comparing rates based on payout amounts to see if a lower amount is more affordable or if you can afford a policy with a higher payout.

Driving Record

It may initially seem odd that life insurance companies use driving records to calculate rates. However, life insurance companies don’t care about parking tickets. Only major driving incidents show that someone is a higher risk to insure.

Examples of what an insurance company would look at when factoring rates would be DUIs or DWIs, as driving impaired puts your life at risk and makes you riskier to insure.

Family Medical History 

Many health issues can be genetic, so life insurance companies want to know if you have a family history of major health issues. If you have a family history of cancer, diabetes, and other detrimental health issues, your life insurance company may view you as a higher risk and charge a little more. For example, read more about how to get life insurance with heart disease in this article. 

Gender

Life insurance rates by age and gender vary. Generally, insurance companies charge men slightly more than women for life insurance. The average life expectancy of men is less than women, affecting men’s average cost of life insurance. 

Health

Naturally, your health is one of the most important factors insurance companies consider to calculate your life insurance premiums. Your health determines your life insurance rating classes, which affects what you pay. 

Some of the information they’ll want is simple, like height and weight. They’ll also want to know if you have any pre-existing conditions, such as high blood pressure or high cholesterol. 

Some life insurance companies require you to complete a simple medical examination before issuing a policy so they can record your blood pressure and other simple health facts. 

Occupation and Lifestyle 

Your occupation impacts how much you’ll pay for life insurance because some jobs raise your life insurance cost. For example, if you have a high-risk job, such as a police officer, you’ll pay more for life insurance than an office worker.

Insurance companies will also ask about your lifestyle to determine your rates. For example, driving race cars on the weekends can make you a higher risk to insure.

Smoking Status 

All life insurance companies want to know if you smoke or not. Life insurance is more expensive if you’re a smoker, as smokers are more prone to developing serious issues like lung cancer. There is also a link between e-cigarettes and life insurance because this may result in tobacco rates. 

Read more: How To Get Life Insurance With Lung Cancer

Factors That Don’t Affect Your Life Insurance Rates 

We’ve covered numerous factors that can drive your life insurance rates up, so you might wonder if anything won’t affect what you pay.

Regarding life insurance rates, the following factors won’t affect how much you pay for life insurance:

• Diversity. Life insurance companies can’t discriminate based on a person’s race, ethnicity, sexual orientation, and similar factors. 
• Location. Unlike home and auto insurance coverages, your location usually doesn’t impact your life insurance rates.
• Marital status. Life insurance rates won’t change based on whether you’re married or single. Likewise, your partner’s health won’t affect your life insurance rates.
• Number of beneficiaries. The number of beneficiaries you put on your life insurance policy won’t affect your rates.
• Number of life insurance policies. The amount of life insurance policies you have won’t affect your rates, though you’ll likely need to provide a reason for purchasing more than one coverage.

Essentially, as long as an aspect of your life or policy doesn’t affect your risk level, it won’t be used as a rate calculation for life insurance rates. Only if a factor directly impacts your health or risk status will it be used in life insurance calculations.

How to Save on Life Insurance Rates

Life insurance isn’t a cheap purchase. If you’re struggling to fit life insurance payments into your budget or just want to save on your policy, you’re probably wondering what you can do to reduce your life insurance rates. 

Below are a few tips you can follow to save on life insurance rates:

• Buy minimum coverage. You can choose a policy with a smaller payout amount to save money or choose a cheaper policy type like term life insurance. Read more about a life insurance coverage minimum in this article.
• Buy earlier rather than later. The earlier you purchase life insurance, the less your annual life insurance premiums will be.
• Improve your health. Losing weight, quitting smoking, and other lifestyle changes can help you find savings on life insurance policies.
• Pay in a lump sum. Some life insurance companies will charge more if you pay monthly premiums instead of a bulk lump sum for the year. Check to see if your insurance company offers a discount for paying in lump sums.
• Shop around. Naturally, one of the best things you can do to save on life insurance rates is to shop around and get quotes from a few different life insurance companies.

The above tips can help you shave some money off your life insurance rates. Life insurance isn’t unattainable if you do your research and choose an affordable policy. 

Read more: Life Insurance Rate Bands: How They Can Save You Money

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Case Studies: The Cost of Life Insurance

Case Study 1: Affordable Protection With LifeShield Insurance

John, a 35-year-old non-smoker, was looking for a life insurance policy to protect his family’s financial future. After researching different options, he decided to approach LifeShield Insurance, a reputable provider known for its competitive rates.

Based on John’s excellent health condition and his desire for a $500,000 coverage amount, LifeShield Insurance offered him a term life insurance policy for a monthly premium of $30. This affordable option provided John with the peace of mind he sought while fitting within his budget.

Case Study 2: Tailored Coverage With SecureLife Insurance

Samantha, a 45-year-old individual with a pre-existing health condition, wanted to secure life insurance coverage that met her specific needs. She reached out to SecureLife Insurance, a well-established company known for its flexibility in underwriting policies for individuals with health challenges.

After assessing Samantha’s medical history and considering her desired $1,000,000 coverage, SecureLife Insurance offered her a customized policy with a monthly premium of $150. Despite her health condition, Samantha was able to obtain comprehensive coverage that provided her and her family with the financial protection they required.

Case Study 3: Competitive Rates With TrustGuard Insurance

Michael, a 55-year-old smoker, sought life insurance and approached TrustGuard Insurance, known for its competitive rates for smokers. TrustGuard Insurance offered him a $250,000 whole life insurance policy with a $200 monthly premium.

Despite being a smoker, Michael was able to secure coverage at a reasonable cost, ensuring his family’s financial well-being in the future.

Case Study 4: Guaranteed Acceptance With LifeSure Insurance

Sarah, a 65-year-old individual with a history of health issues, wanted to obtain life insurance coverage without undergoing a medical examination. She turned to LifeSure Insurance, a reputable provider specializing in guaranteed acceptance policies.

Taking into account Sarah’s age and her need for a $100,000 coverage, LifeSure Insurance offered her a guaranteed acceptance whole life insurance policy with a monthly premium of $250. Sarah found peace of mind knowing that her loved ones would receive financial support, regardless of her health history.

The Final Word on Life Insurance Costs 

So how much does life insurance cost? Life insurance costs vary drastically based on an insured’s policy choice, health, age, and other factors. It’s best to buy a life insurance policy when you’re younger to lock in cheaper rates, but older seniors can find savings by purchasing cheaper policies like term life insurance.

It’s vital to shop around and compare quotes to find a company offering the lowest rates based on your profile. One option is to use a term life insurance calculator online. You can often get free quotes directly from the insurance company or use a quote comparison site to get multiple free quotes at once.

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