Amanda Hester

Meta: How much is life insurance? That’s a common question, with a complicated answer. Read more about how life insurance rates are calculated, and what you can expect to pay here.

So you’ve decided it’s time to bite the bullet and get life insurance. Maybe you’ve recently gotten married or had your first child, and you want to make sure they’re well taken care of. Or maybe you heard that life insurance pays triple on a business trip, and you’re going to be traveling for work again soon.

Whatever your reasons for wanting to find out more about life insurance (sorry, unless your question is how to find unclaimed life insurance policies!) read on. We’ve got all the latest life insurance policy pricing information for you.

How Much Is Life Insurance?

According to Quotacy, the average life insurance policy is currently $26 a month. That’s assuming you’re 40 years old, in good health, and you want to buy a 20 year term policy.

But there’s a good chance you’re not 40, might not be in great shape, and might want something different – like a 250k whole life insurance policy. In that case, you should know that the “average” life insurance policy rarely ever applies.

Policies and premiums are calculated based on individual circumstances, and there are various factors that apply.

How Life Insurance Rates Are Determined

Life insurance rates are calculated based on complex formulas that take into account your age, gender, health, lifestyle and various other issues. So, for instance, if you’re generally healthy but you smoke, you would pay more for your premium than someone else who is the same age, in the same general health, but is a non smoker.

You can also choose to buy either term life insurance, which is valid for a fixed number of years, or to buy whole life insurance, which includes various other investments and options.

Your insurance broker will ask you to provide a variety of information about your age, health, medical history, bad habits and more. Then they will use all of that information in a reliable life insurance premium calculator, and quote you a rate based on all those things.

Average Cost of Life Insurance by Age and Gender

The average cost of life insurance goes up as you age and is usually cheaper for women (if all other factors are equal.)

So, for instance, a 30 year old man in good health applying for a $500,000 policy might be quoted an annual rate of $227, while a woman the same age in good health would be $193.

By age fifty, the same people, assuming they are still in equally good health, would be quoted $842 (for the man) and $654 (for the woman.) While this might seem unfair, women tend to take less risks, and they generally have longer average lifespans than men – so it’s all based on science and fact!

Average Cost of Life Insurance by Policy Type

Age and gender aren’t the only factors that affect the cost of a life insurance policy.

In fact, for the same $500,000 policy, at 30 years old, a man would be quoted $227 for a standard term life policy, but $4,015 for a whole life policy! The same woman, at 30, would be looking at $193 for term life, and as much as $3,558 for a whole life policy.

Of course, whole life policies cover a lot more and have more benefits, so there are pros and cons aside from just the price to consider.

Average Cost of Life Insurance by Health

Life insurance companies know that the better your health right now, the longer you are likely to live.

Because of this, they categorize each customer as either “super preferred”, “preferred” or “standard.”

Standard doesn’t necessarily mean you’re in terrible shape, but rather that you don’t live the healthiest lifestyle. A super preferred customer, on the other hand, has no negative medical history, is in great shape, and makes mostly healthy choices.

This can have a big impact on your life insurance rate though. In fact, the same 30 year old woman getting a 20 year, $500,000 term life policy would pay $193 as a super preferred customer, $233 as a preferred customer, and as much as $354 as a standard customer. That’s a big difference, so it’s worth paying more attention to your health! 

Average Cost of Life Insurance by Term Length

If you first take out a life insurance policy when you’re 30, you probably have about 50 years before you are likely to die. This makes you lower risk for life insurance companies. Even if they give you a twenty year term policy, you’re likely to outlive it by thirty years!

But when you get to fifty, you’re a lot closer to the time that you might conceivably pass away, so there’s more risk. Which is why, the older you are, the more your life insurance policy will cost you per year.

Average Cost of Life Insurance by State

As if your age, gender, health and policy type wasn’t enough, life insurance companies will also charge different rates by state. This factors in the average life expectancy in the state, as well as other issues like how safe it is to live there, how likely natural disasters are to occur and many other things.

How to Compare Life Insurance Policies to Find Your Ideal Rate

When you get quotes from life insurance companies, make sure you’re comparing apples with apples.

Look at whether they are both term life policies. Then make sure the value of the policies are the same.

Sometimes, insurers exclude certain things, or they will have longer waiting periods for some things.

If there are very big differences between the prices of the quotes you get, go back to the person who gave you each one, and ask them why that might be. There may be a good reason why you would pay more with one company than another.

Finally, remember that when you’re buying life insurance, price is not the only consideration. You also want to choose a reputable company, that you know will still be around if your family ever needs to make a claim. So take a close look at their history, track record and reviews before you sign on the dotted line!


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