Life Insurance Rates | Average Policy Cost by Age, Type, Term & More
While most people are well aware of what life insurance is and how it works, not everyone has it.
While most agree that it is best to get life insurance while you are young and healthy, not all ultimately do that.
One of the main reasons that stop people from getting life insurance is the cost. What you might not know is that actually, life insurance is not that expensive (if you don’t wait too long).
In this post, I’ll cover the factors that determine your life insurance cost as well as rates for different age groups. I’ll also share some great tips on how to lower your life insurance premiums.
How Are Life Insurance Rates Determined?
All insurance companies use calculators that determine your life insurance cost. To put it simply, they try to predict your life expectancy.
Usually, they will use something called mortality tables. The longer your life expectancy – the cheaper the premium.
What Factors Determine the Cost of Life Insurance?
Before giving you a quote, the insurance company will gather as much information as possible about you. This helps to determine your life expectancy and, therefore, the premium amount. While there can be many factors they take into consideration, these are the typical ones:
Age is one of the main factors taken into account when insurers are calculating the premium. The premium increases with your age. Check out the rates by age chart to see how much your premium can go up, depending on your age.
Gender is an important factor in calculating life expectancy. Women will pay, on average, 24% less for their life insurance since they are expected to live longer than men. Men are expected to live for 76.1 years and women for 81.1 years, according to the Center for Disease Control and Prevention.
Pre-existing Medical Conditions
Many pre-existing health conditions can increase your premium (such as obesity, high cholesterol, high blood pressure, heart disease, and many more). With most life insurance policies, you will be asked to undergo a medical examination. They will check your cholesterol, blood pressure, and chronic conditions.
Family’s Medical History
The insurance company will always check the medical history of your immediate family. They look for genetic diseases, cancer, and other factors that can help to predict your life expectancy.
Occupation and Lifestyle
Your premium might depend on your occupation if you’re in a dangerous job and might be exposed to more risks. Lifestyle matters as well; premium will be higher if you are an extreme sports enthusiast, for example. The usage of nicotine products is also one of the main factors as well as physical activity and food preferences.
Life insurance rates also depend on the type of policy you choose. Most companies will offer permanent and term life policies (which can be for 10, 20, or 30 years). Whole life insurance premiums will be the priced the highest, with term insurance premiums varying, depending on the duration. You can also choose the policy payout amount, which usually is $250,000, $500,000, or $1,000,000.
The coverage amount is also referred to as a death benefit. This is the amount your family will receive after you are, well, gone. Most insurance companies offer coverages ranging between $100K and $1M. The higher the coverage, the higher the rates.
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Life Insurance Rates by Age & Gender
Most people don’t think about life insurance when they are young and healthy, but life insurance premiums increase depending on your age. Maybe the difference is not significant between 25 and 35 years old, but the older you get, the faster the premiums will increase. This is why young people should start thinking about their future and get life insurance as early as possible.
As you can see in the table below, which we compiled from PolicyGenius, the longer you wait to get your life insurance, the more you will pay every month.
|Age||$500k Policy (Male)||$500k Policy (Female)|
Sample monthly premium rates from PolicyGenius and are based on a 20-year term life insurance policy for a non-smoker with a Preferred health rating.
Life Insurance Rates by Coverage Amount
When signing up for life insurance, you will have to choose the amount of coverage you need.
Here are some sample quotes for varying amounts of coverage, from $250,000 to $2 million dollars:
|Age||$250K||$500K||$1 Mil||$2 Mil|
Sample monthly premium rates from PolicyGenius above are based on a 20-year term life insurance policy for a non-smoking male.
How Much Life Insurance Do You Need?
If you are not sure how much you need, there are a lot of online calculators to help you with that.
To calculate how much life insurance you actually need, you can use one of the many life insurance calculators available online, or you can easily calculate it yourself. Even if you use an online calculator, you will need to consider a few factors, such as:
- Income: If you have a family that depends on you, it is important to see if they could manage to live without your income. This is especially true if you have joined debts, such as a mortgage. When calculating this bit, see how much money they would need to replace your income until the debts are paid off.
- Expenses: Calculate all other ongoing expenses, such as bills and credit cards. Make sure your family will have enough to cover them in case you’re not around anymore.
- Dependents: This is very important for parents with young children or people with elder parents that might depend financially on you. Make sure your kids will be covered financially until they graduate and can support themselves financially.
- Assets: Consider and calculate all of your stocks, investments, retirement plans, and any other assets you might have. You might find that this is enough for your family to be covered. If not, calculate the difference to make sure you’ve got all your bases covered.
Life Insurance Rates by Policy Type
There are many different kinds of life insurance offered by different insurance companies. The most common life insurance types are classified by the length of their term:
- Term life insurance: This type of life insurance is signed for a fixed period of time
- Whole life insurance: This type of life insurance lasts as long as you live and includes a cash value that grows over time
Whole life insurance is generally 6-10 times more expensive than a similar term life policy.
Here are some sample quotes for a term vs. whole life insurance policy. This chart compares the monthly premiums for a 20 year term policy ($250K death benefit) and a whole life policy ($100K death benefit) for a male in the Preferred health class.
|Age||Term ($250K)||Whole ($100K)|
As you can see, the term policy offers more than double the amount of coverage at a much lower rate.
Term Life Insurance Rates
Rates for term life insurance depends on the length of the policy as well as other personal factors.
A 10-year insurance policy is generally the cheapest option, but 20-year term insurance is the most common one. A $500K policy for 10 years costs 14% more on average than a 20-year term insurance policy. While the difference may not seem significant, you should choose the term length that best suits your situation and budget.
Here are some sample rates from PolicyGenius for the most common term lengths (10, 20, and 30-year):
Sample monthly rates based on $500K in coverage for a Preferred non-smoking male.
N/A= Policy not available for that age/term
3 Tips to Lower the Cost of Your Life Insurance
Now that you are familiar with the main factors determining your life insurance cost, you can take steps to make sure you lower your cost as much as possible. While it might not be easy to change your gender if you are a man to pay less in premium, there are plenty of things that are in your control.
1. Get Insurance While You’re Young
As discussed before, age plays a big role in your premium size. You can save a lot monthly when getting life insurance in the earlier years. On average, life insurance premiums increase by about 8-10% every year.
2. Stay In Good Health (Quit Smoking)
Smokers pay, on average, 306% higher life insurance premiums, compared to non-smokers (another reason to quit). If you do decide to quit, not only will you save on life insurance premiums, but also the money you spend on purchasing tobacco products! Sounds like a win-win, right? Maintaining a healthy lifestyle, like eating healthy food and staying active can have a positive effect on your weight, blood pressure, and cholesterol levels. All these factors are typically considered when determining your premium.
3. Avoid Extreme Sports and Risky Activities
If your lifestyle exposes you to many risks (like trauma and accidents), your premium could increase as a result. To lower the cost of life insurance, try to stay away from extreme sports and other risky activities (as much as you can).
Where to Find the Best Rates for Life Insurance
There are many insurance companies offering life insurance. No one company is the best for all. Once you figured out your needs and set the budget, your best bet is to look at a few different insurance providers, get quotes, and compare them. This will help you to find the insurance provider and life insurance policy that fits you the best.
Here, we looked at two of the top life insurance companies and also one platform that compares the quotes from many insurance companies for you. These platforms might be the best way to go for those who don’t have time to do insurance shopping themselves. It is a convenient and informative way to find the best offer for you out there.
Haven Life Insurance Agency offers some of the best term life insurance rates through MassMutual. Their application procedure is easy and well explained on their website. You can choose the size of your policy with payouts ranging from $100K to $3M. The length of the term varies from 10 to 30 year term life insurance policies. Once you have those numbers figured, you can start your application or get a quote.
While there are some exceptions, most applicants need to go through a medical exam before the rate is finalized. The monthly premium is fixed and will not change during the term.
Haven Life has many extra benefits for their customers, such as an online deposit box for documents, discount vouchers for health services, and others.
- Online application
- Real online rate calculator
- Many extra benefits
- Owned by MassMutual, one of the leading insurance companies
- Available in 10, 15, 20 and 30-year term lengths
Want to know more about Haven Life? Check out my Haven life insurance review.
Bestow is an insurance company that makes getting life insurance easier, faster, and more affordable. Thanks to their algorithms, you don’t need a medical exam to get life insurance.
The application process can be done online just by answering a few questions, so you can do it in minutes, any time of the day. Bestow offers both long (10 and 20 years) and short (2 years) term life insurance plans that can be canceled at any time. If you have any questions at all, Bestow’s friendly customer support team and licensed insurance agents are there for you.
- No medical exams
- Competitive pricing
- You can apply online in just a few minutes
- Great customer support
- A+ rated for financial strength
- Flexible cancellation
Bestow is available online only – but that’s hardly a drawback for a millennial!
For more information about their life insurance, check out my Bestow life insurance review.
PolicyGenius is a platform that makes buying life insurance easy. After you answer a few questions, they will get quotes from many insurance companies. Here, you can see different quotes, compare prices and policies, and then decide which one works the best for you.
PolicyGenius also has a great team of qualified insurance experts that can answer all of your questions if you need any help. If you don’t know how much life insurance you need, you can use their calculator to calculate it. Once you pick the insurance company you wish to proceed with, you proceed through PolicyGenius fast and easy.
- Easy and fast to use platform
- Compares multiple life insurance quotes
- Features policy calculator
- BBB rating of A+
- Free to use
Want to know more about PolicyGenius? Check out my Policygenius review.
Sample Quotes from Top Providers
Here are some sample monthly premium costs from the best life insurance companies.
The following quotes are for a 20-year term policy with $500,000 in coverage:
|Company||30 Year Old (Male)|
|Mutual of Omaha||$28.17|
What Is Life Insurance & Do I Need It?
Life insurance is a way to make sure your loved ones are taken care of when you will not be around anymore. Unlike other kinds of insurance products, life insurance is created not for you – but for those depending on you financially. The benefit will be paid out to your family after you pass away. It is the best choice for those who are the main income providers in the family. Having life insurance will allow your family not to worry about finances in the most difficult of times.
How Much is Life Insurance for a 30 Year Old?
The cost of life insurance for a 30-year-old depends on many factors. It will directly depend on the policy value and the term you choose. Another strong factor is your overall health as well as gender. Although most 30 year olds tend to be healthy, some might be using nicotine products, which can increase the premium amount quite drastically. Non-smokers can pay as little as $25 a month for a 20-year term life insurance with a face value of $500,000. Smokers, on the other hand, might pay over $80 a month for the exact same policy. The premium gets lower with shorter terms and lower death benefits.
How Much is Term Life Insurance for a 70 Year Old?
It’s always the best idea to get life insurance when you are young, but for those who didn’t, it is not too late to get it in their 70s! Some insurance companies might have an age limit on their policies, but it is certainly possible to get life insurance at the age of 70. The average life insurance monthly cost for a 70 year starts at $445.39 for $250K coverage and can go up to $1,666.64 for $1M coverage, according to Policygenius. These rates are based on a healthy, non-smoking, individual and might go up depending on certain conditions. As you can see, rates are considerably higher (so get in while you’re young!).
How Much Does Life Insurance Cost for a 75 Year Old?
The older you get, the more difficult it might be to find the best life insurance policy. The rates also heavily depend on your medical condition and other factors. Therefore, it is hard to find an exact cost of life insurance for a 75-year-old. After doing some research, we found that an average 10-year term life insurance for $500K coverage costs $457.55 for women and $819.43 for men. If you are older than 75 years old, you will have to consult an insurance agent to get an estimated cost for term life insurance.
When Is The Best Time to Buy Life Insurance?
Life insurance is one of those things – the sooner you cross it off your list, the better. My advice would be to get life insurance in your 30s (if not before). There are many reasons for that – but mainly, it’s an excellent way to lock in a decent rate when you’re young and healthy.
As you can see, life insurance gets increasingly more expensive with age, meaning the later you buy it, the worse of a deal you’re going to get. Buying life insurance in your 30s is one of the best ways to take care of the financial wellbeing of your loved ones. You can have the peace of mind that should something happen to you, your family will not stumble upon financial difficulties – and know you’re paying the lowest possible rate.