How Much Does Life Insurance Cost?

How Much Does Life Insurance Cost?

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How Much Does Life Insurance Cost? If you’re looking for life insurance, there are dozens of companies, term lengths, and coverage amounts to choose from.

There is no doubt that the price will influence your decision and may determine the type of policy you choose. To get a snapshot of these rates, we compared average life insurance rates for men and women of different ages and health levels, across multiple coverage options.

How Much Does Life Insurance Cost?

How Much Does Life Insurance Cost? The average cost of life insurance is $26 per month. This is based on data provided by Quotacy for a 40-year-old who buys a 20-year term life insurance policy worth $500,000, the most common term length and amount sold. But life insurance rates can vary widely between applicants, insurance companies, and policy types

How are life insurance rates determined?

Life insurance premiums are primarily based on life expectancy. In general, the younger and healthier you are, the cheaper your premiums.

Insurance companies typically categorize applicants using terms such as highly preferred, preferred, and standard, with ultra-preference being the most valid category. Insurance companies then calculate premiums based on your risk category.

Each insurance company has its own valuation process – known as life insurance underwriting – and weighs the factors differently. This is why it is a good idea to compare quotes from several insurance companies.

These are the main things insurance companies evaluate when setting your rate:

·         Your age

In general, young people pay less for life insurance. This is because as you age, your life expectancy decreases, and the likelihood that your insurance company will pay your policy go up. This is why it is wise to purchase life insurance as early as possible; the longer you wait, the higher your rates based solely on age.

Your gender. Because women have a longer life expectancy, women will always pay less than men of similar age and health. Life expectancy in the United States is 79.9 years for women and 74.2 years for men, according to the latest data from the Centers for Disease Control and Prevention.

·         Your smoking status

Since smokers are at a higher risk of developing health problems such as respiratory disease, life insurance for smokers tends to be more expensive.

·         Your Health

This includes any pre-existing conditions, as well as your blood pressure and cholesterol levels. Insurance companies will also consider your height and weight.

·         Your family medical history

Your insurance company may ask if you have a family history of serious health conditions such as heart disease, cancer or diabetes.

·         Your driving record

If you have DUIs, DWIs, and significant traffic violations on your record, your insurance company may consider you a high-risk life insurance claimant and charge higher rates.

·         Your profession and lifestyle

If you have a dangerous or high-risk job, such as a police officer working in a bomb squad or a race car driver, you can expect to pay more than someone with a desk job. Likewise, if you engage in risky activities such as skydiving, you may be charged a higher premium.

How Much Does Life Insurance Cost?

How Much Does Life Insurance Cost? The type of life insurance you choose also affects the average cost of life insurance:

  • Life insurance is the least expensive because it lasts for a fixed number of years and simply provides coverage without building cash value.
  • Permanent life insurance usually lasts for life and includes a cash value component that allows you to borrow against your policy or withdraw money later in life. Because of the cash value and potential longer coverage period, you will pay significantly more for permanent insurance policies than for term life insurance policies.
  • Finally, adding commuter life insurance to your policy can increase your premium. For example, a $10,000 child passenger can cost an extra $50 to $75 per year, according to Quotacy.

What Does Not Affect the Life Insurance Premium

These factors have no effect on the price offered to you:

1.      Your race, ethnicity, and sexual orientation

While insurance companies assess your age and gender, they cannot discriminate based on these elements of diversity.

2.      Your credit score

Although your credit score won’t affect your life insurance premium, you can expect your insurance company to look at your credit history going back seven years. If you have bankruptcy on your record, you may be considered at a higher risk of death, which could affect your premiums.

3.      Marital status

Unlike many auto insurance companies, life insurance companies do not have different rates for married applicants.

4.      The number of life insurance policies you have

Just know that you need to justify buying large amounts of coverage across multiple policies.

5.      The number of beneficiaries you name

Whether you have one or five life insurance beneficiaries, it won’t affect your rates.

How Much Does Life Insurance Cost – The average cost by age

These annual life insurance rates are based on a $500,000 20-year life insurance policy for highly favored applicants.

AgeThe yearly average rate for menYearly average rate for men

How Much Does Life Insurance Cost  – Average cost by health

These annual life insurance rates are based on a $500,000, 20-year term life policy.

Age and genderSuper preferredPreferredStandard
Woman, 30$187$222$338
Woman, 40$283$346$503
Woman, 50$643$761$1,143
Woman, 60$1,656$1,891$3,031
Woman, 70$8,204$8,662$10,574
Man, 30$222$281$407
Man, 40$334$415$647
Man, 50$819$978$1,514
Man, 60$2,361$2,658$4,232
Man, 70$9,288$10,934$14,180

How Much Does Life Insurance Cost – Average cost by term length

These annual life insurance rates are based on a $500,000 term life policy for a 40-year-old applicant in the super preferred class.

Term lengthAverage annual rate for menThe average annual rate for men
10 years$205$180
20 years$334$283
30 years$581$462


How Much Does Life Insurance Cost? Life insurance is not one size fits all. While the average amount can give you an idea of what you’ll pay, many factors go into life insurance costs, such as the type of coverage, age, where you live, and other personal factors.