Average Life Insurance Cost

No matter what your age, health, or lifestyle may be, purchasing a life insurance policy is something that may certainly be in the best interest of you and your family.

With a quality life insurance policy, you can gain access to the long-term financial protection you need. Because of this, and the high costs associated with life insurance, it is considered to be a significant investment.

The cost of a life insurance policy is determined in the underwriting process.

Underwriting is the process of determining risk.  Life insurance companies use an applicant’s overall risk to then determine life insurance premiums. what is the average cost of life insurance?

Some factors that come into play when determining the risk of a life insurance applicant are:

  • Health
  • Age
  • Gender
  • Occupation
  • Lifestyle
  • Family History
  • Medical History

With seemingly countless different life insurance providers to choose from, and every person is different, there will naturally be a significant amount of variation between any two life insurance companies when it comes to price.

How Can I Find the Best Life Insurance Rates?

Working with an independent agency or website can make it significantly easier to compare multiple different options at once, to find the best life insurance rates for you.

Because there are so many different variables involved in the underwriting process, answering the question “how much does a life insurance policy cost?” can be rather subjective.

By taking the time to understand the dynamics of the industry, you can be in a much better position to find the life insurance policy that is best for you.

This article will briefly examine the process of pricing a life insurance policy and offer some useful advice on how to make your final decision. Later on, we will also dive into the average cost of life insurance for various policy types.

First, let’s take a look at the two main types of life insurance policies offered on the market.

What are the Most Common Types of Life Insurance Policies?

Unsurprisingly, one of the biggest influencers of the cost of a life insurance policy is the specific type of policy you are applying for.

Naturally, if you only want a small amount of coverage for a limited amount of time, your policy will cost less. Wanting more extensive coverage and things such as riders, cash value, and convertibility options can often make a life insurance policy cost more.

Generally speaking, most life insurance policies will fall into one of two given categories:

Term Life Insurance Policies

offer coverage that will last for a specific “term.” Usually, this term will be for 10, 20, or 30 years, though there is a significant amount of variation throughout the industry.

These policies are the most popular due to their relative affordability. Some term life insurance policies will cost less than $10 per month.

Permanent Life Insurance

On the other hand, will provide you with coverage that lasts for your entire life. Additionally, many of these policies will also include a “cash value” which is a tangible financial asset that can be accessed while you are still alive.

Due to the increased length and depth of these policies, permanent life insurance coverage will often cost more.

How Much Life Insurance Can I Get?

The amount of coverage you are applying for—which can vary anywhere from $1,000 to even $5,000,000—will also have a significant impact on your monthly premiums.

Though a $5,000,000 policy will not cost 1,000 times as much as a $5,000 policy, the cost of the larger policy will naturally be significantly greater.

Other policy variables that affect the cost of a life insurance policy include add-ons frequently referred to as riders. Life insurance policy riders include things such as disability insurance, other types of insurance, and the incorporation of additional financial assets.

Riders, by definition, are optional—if you choose to add any riders to a policy, the monthly cost of that policy will naturally increase.

How Much Does Life Insurance Cost?

As stated, the cost of a life insurance policy will depend on a tremendous amount of variables. The underwriting process involved in pricing life insurance is incredibly complex and can take anywhere from a few hours to several weeks in order to be fully completed.

If a life insurance policy is advertised as offering “guaranteed” or “immediate” coverage, the underwriting process will obviously require significantly less time. However, these policies are not always the best in terms of the benefits to costs ratio.

Though the approach to underwriting will vary significantly between potential insurance providers and potential policy types, there are still many variables that will quite frequently be accounted for.

  • Your age at the time of application
  • Your health (medical conditions, medical history, etc.)
  • Your gender (women will typically pay less for life insurance)
  • Your lifestyle (high-risk occupations, smoking, etc.)
  • The amount of coverage you are applying for
  • Relevant riders
  • Variables that are specific to the company itself

Generally speaking, anything that indicates the insurance provider may need to pay out the policy sooner will increase the amount that they ask you to pay each month (premiums).

Because there exists such a wide range of variation in prices throughout the life insurance industry, it is very important to compare several possible options before making any final commitments.

If you are curious about the impact that a specific variable—such as your age and gender—may have on a life insurance policy, you can often experiment using sample applications in order to find out.

How Much Does Health Affect the Price of Life Insurance?

Health is among the most important variables that will be considered during the underwriting process.

Because there are a wide variety of common health issues that can decrease your life expectancy (and thus change the projected payout for the insurance provider), many life insurance policies will require a thorough medical exam and questionnaire before offering you a final quote.

Some of the most common medical conditions that can affect the cost of a policy are:

  • Obesity
  • Heart conditions
  • Cancer
  • High blood pressure
  • High cholesterol
  • Various mental health issues
  • Numerous others

Additionally, because smoking statistically decreases your life expectancy, this is also something that will often be considered.

Smokers receive some of the highest risk classifications, other than people with terminal illnesses, which can cause life insurance rates for smokers to be 2-5 times more expensive than non-smokers.

If you are able to quit smoking, lose weight, or overcome a disease, many life insurance providers will be willing to adjust your rates downward in the future.

What if I Can’t Afford Life Insurance?

Occasionally, people become very ill and need life insurance coverage for their families.

In this case, or in the case of someone who is a high-risk individual who cannot afford traditional life insurance options, no medical exam life insurance might be for you.

There are a few types of no medical exam life insurance available, including:

Guaranteed Issue Life Insurance

Guaranteed acceptance life insurance is exactly what it sounds like.  In this type of policy, coverage is guaranteed for the whole life of the person.  Almost anyone can be approved for this type of policy.

As a result, policy coverage is low, usually only going up to $50,000, with a few coverage options stretching to $100,000. Also, rates are higher than traditional life insurance policies.

Simplified Issue Life Insurance 

Simplified issue life insurance policies also have no medical exam, but do ask a few questions about your health history and family history, and sometimes can ask more questions.

These policies do not provide coverage as quickly as guaranteed issue, but provide life insurance coverage at a cheaper rate.

How Much Does Age Affect the Price of Life Insurance?

Age will also have a significant impact on the cost of a life insurance policy. This is particularly true for term policies.

When all else is equal, the older you are, the closer you will be to passing away. Because such a fact of life is simply unavoidable, age will often have a greater impact on the underwriting process than any other variable.

However, just because being older will increase your monthly premiums, that does not mean you should dismiss the possibility of securing a reasonably priced policy.

How Much Does Gender Affect the Price of Life Insurance?

Of the different variables that have been mentioned in this article, gender probably has the least amount of impact on the cost of a policy.

Women will typically be able to pay less per month for life insurance coverage, but the increase in cost for men will not be nearly as great as it would be if they were smokers, had serious medical conditions, or were even just five years older.

How Much Does Life Insurance Cost?

In order to better understand the underwriting process, it can be incredibly helpful to compare different life insurance costs.

Below are some charts that show sample life insurance rates some common scenarios.  Each of them shows rates for men and women, in different age groups.

Life Insurance Rates for Healthy People 

Below are some of the best term and whole life insurance rates on the market for males and females, who are in excellent health.  Note all term and whole life policies are for $500,000 of life insurance coverage.

AgePolicyMaleFemale
2310 Year Term$13/mo.$10/mo.
20 Year Term$19/mo.$16/mo.
30 Year Term$31/mo.$24/mo.
Whole Life$152/mo.$128/mo.
3310 Year Term$13/mo.$12/mo.
20 Year Term$20/mo.$17/mo.
30 Year Term$35/mo.$29/mo.
Whole Life$160/mo.$136/mo.
4310 Year Term$23/mo.$21/mo.
20 Year Term$39/mo.$32/mo.
30 Year Term$68/mo.$53/mo.
Whole Life$312/mo.$256/mo.
5310 Year Term$57/mo.$41/mo.
20 Year Term$99/mo.$73/mo.
30 Year Term$190/mo.$141/mo.
Whole Life$814/mo.$561/mo.
6310 Year Term$157/mo.$102/mo.
20 Year Term$304/mo.$203/mo.
Whole Life$1,884/mo.$1,224/mo.
7310 Year Term$500/mo.$324/mo.
Whole LifeN/AN/A

Life Insurance Rates for Smokers

Below are some of the best term and whole life insurance rates on the market for males and females, who are smokers, but in otherwise good health.  Note all term and whole life policies are for $500,000 of life insurance coverage.

AgePolicyMaleFemale
2310 Year Term$50/mo.$38/mo.
20 Year Term$65/mo.$49/mo.
30 Year Term$96/mo.$66/mo.
Whole Life$520/mo.$392/mo.
3310 Year Term$54/mo.$44/mo.
20 Year Term$81/mo.$65/mo.
30 Year Term$133/mo.$97/mo.
Whole Life$648/mo.$520/mo.
4310 Year Term$99/mo.$81/mo.
20 Year Term$172/mo.$126/mo.
30 Year Term$285/mo.$198/mo.
Whole Life$1,376/mo.$1,008/mo.
5310 Year Term$237/mo.$169/mo.
20 Year Term$398/mo.$282/mo.
30 Year Term$649/mo.$410/mo.
Whole Life$3,267/mo.$2,530/mo.
6310 Year Term$578/mo.$382/mo.
20 Year Term$873/mo.$694/mo.
Whole Life$6,936/mo.$4,584/mo.
7310 Year Term$1,651/mo.$872/mo.
Whole LifeN/AN/A

 No Medical Life Insurance Rates

Below are some of the best no medical exam life insurance rates on the market for males and females.  Note all policies are seeking $25,000 of life insurance coverage.

AgePolicyMaleFemale
2310 Year Term$8/mo.$7/mo.
20 Year Term$8/mo.$8/mo.
30 Year Term$9/mo.$9/mo.
Whole Life$11/mo.$9/mo.
3310 Year Term$9/mo.$8/mo.
20 Year Term$10/mo.$9/mo.
30 Year Term$11/mo.$11/mo.
Whole Life$16/mo.$13/mo.
4310 Year Term$12/mo.$10/mo.
20 Year Term$13/mo.$13/mo.
30 Year Term$14/mo.$14/mo.
Whole Life$21/mo.$20/mo.
5310 Year Term$20/mo.$16/mo.
20 Year Term$25/mo.$20/mo.
30 Year Term$43/mo.$35/mo.
Whole Life$34/mo.$30/mo.
6310 Year Term$40/mo.$30/mo.
20 Year Term$70/mo.$57/mo.
Whole Life$57/mo.$47/mo.
7310 Year Term$116/mo.$95/mo.
Whole LifeN/AN/A

Conclusion

Life insurance is a valuable component of your financial portfolio that can have a major impact on your family’s financial security. Applying for a life insurance policy is a conservative investment that will frequently pay off over time.

Depending on your age, health, lifestyle, career, and family history, you can experience a large variation for life insurance price.

However, after reading this article, you should have a good idea of how much life insurance costs for you.

In order to find the best life insurance coverage for your specific situation, use our quoting engine, or give us a call today!

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About Jeff Root

is the owner of rootfin.com. He's an independent life insurance agent who has helped 1,000's of consumers purchase life insurance online and over the phone.

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