How much you pay for life insurance depends on a number of factors, including your age, coverage options and more.
Updated:
Apr 12, 2024
Written by
Saad Imran
Saad Imran
Edited by
Tori Addison
Tori Addison
The cost of a life insurance policy can vary based on several factors. To determine the average prices, we secret-shopped to obtain quotes for various policy types, coverage amounts and policyholder ages. Based on our research, the monthly cost of life insurance is $22 for a 30-year-old, $32 for a 40-year-old and $80 for a 50-year-old.
What Age Is Best to Get Life Insurance?
The ideal age to purchase a life insurance policy depends on your needs, personal situation and which policy type you’re considering. When deciding if you need life insurance, you can start by assessing your health status and if you have any dependents or significant financial obligations. However, if you plan on waiting, note that the cost of a policy increases with your age.
MARKETWATCH GUIDES TIP
Did you know that the average cost of life insurance increases with age? People are more likely to develop severe health issues with age, which is why insurers charge higher rates as applicants get older. For instance, our research shows that a 50-year-old pays an average of $80 monthly for a policy with $250,000 in coverage, which is $53 more than an 18-year-old.
Average Cost of Term Life Insurance Rates
The cost of term life insurance depends on your age, gender, term length, coverage amount and several other factors. Your insurer will assess these factors to determine the risk of insuring you. To get the best deal, you can compare quotes from several providers. However, we recommend exploring a term life insurance policy with Ethos, which provides a simple process and competitive rates.
See the tables below to understand how the cost of a policy can change based on your age, gender and coverage amount.
Average Cost of Whole Life Insurance Rates
The cost of whole life insurance can vary based on several factors related to your personal situation. Each insurance provider has its own underwriting process and criteria, which is why we recommend requesting an estimate directly from your chosen insurer. However, our analysis shows TruStage is a suitable option for whole life insurance, as it’s a reliable provider that does not require a medical exam for most policies.
Average Cost of Guaranteed Universal Life Insurance Rates
Since the cost of guaranteed universal life insurance depends on your unique situation, we recommend obtaining quotes from providers directly for the most accurate information. Based on our analysis, one option is purchasing guaranteed life insurance from Ethos, as the insurer offers a streamlined application and underwriting process by leveraging technology.
What Factors Impact the Cost of Your Life Insurance Premium
Each insurer has unique underwriting criteria to evaluate an individual's risk profile. It classifies applicants based on several risk factors that can affect insurance rates, including age, health status, gender and more.
Your Age
Statistically, insurance providers expect younger policyholders to live longer, creating a longer window to pay into their policies. This means less risk for insurance companies, which results in lower premium costs. If you’re in your late 20s to early 40s, we recommend exploring life insurance for millennials to try and benefit from lower rates. Note that policy costs will generally increase with age.
Your Health Status and Medical History
Before issuing a policy, your insurer will likely require you to undergo a medical exam — unless you opt for a no-exam life insurance policy. You will likely see higher premiums if you have a history of medical conditions such as cancer, diabetes, HIV, heart disease, high cholesterol or other pre-existing health issues. Those people with a multi-generational history of severe illness or hereditary disease may also be charged higher premiums.
Your Occupation
If you’re in a high-risk career, expect to pay more for a policy. Firefighters, pilots, police officers and construction workers are sometimes denied coverage due to their vocation’s high inherent level of risk.
Your Gender
Life insurance premiums are lower for females because their life expectancy is longer than that of males. Insurers consider it less risky to insure women as it is less likely the company will have to pay out a life insurance claim earlier in the policyholder’s life.
Your Lifestyle
Those people who engage in dangerous hobbies, such as mountain climbing and skydiving, may face higher premiums. Likewise, being a heavy drinker or smoker could impact your insurance costs. However, companies charge lower rates to provide life insurance for non-smokers, which means you might qualify for a lower rate if you quit smoking before applying for coverage. Some states also allow insurers to evaluate a person’s driving record as part of the underwriting process.
Policy Type
The types of life insurance policies include term life, whole life and universal life. A term policy is the cheapest type of life insurance and provides coverage for a specified term, typically between 10 and 35 years. On the other hand, insurers charge higher rates for a whole life policy because it offers lifelong coverage. You can also opt for universal life insurance, which is similar to whole life insurance but provides a flexible premium and death benefit.
Many other options are also available, including variable life insurance, variable universal life insurance, indexed universal life insurance and final expense insurance. If you need help assessing your needs and choosing the right policy type, we recommend speaking with a financial advisor.
Coverage Amount
The higher the coverage amount on your policy, the more you’ll pay in premiums. For instance, an individual looking to use life insurance to cover final expenses may opt for a coverage amount of up to $100,000 and pay a lower premium. However, coverage amounts of over $250,000 provide significant financial security if you have a family and can afford increased rates.
Addition of Policy Riders
Life insurance riders are optional additions policyholders can use to customize and strengthen their coverage. Most riders increase your premium cost and availability varies by insurer. Common riders include:
- Child term life insurance
- Accelerated terminal illness
- Critical illness
- Accidental death and dismemberment (AD&D)
- Waiver of premium
- Guaranteed renewability
What Factors Do Not Impact Your Life Insurance Rate?
The following factors should not affect the rate you’re offered when applying for life insurance:
- Ethnicity, race and sexual orientation: While insurers consider age and gender, a company cannot discriminate based on a person’s ethnicity, race or sexual orientation.
- Number of beneficiaries: The number of beneficiaries you designate should not affect your rates, as costs are more related to how the death benefit will get distributed after you pass away.
- Credit score: Your credit score should not directly affect your life insurance premium, but an insurer will typically review your credit history for up to seven years. Having a history of bankruptcy may deem you a higher risk, for example, which could affect premiums.
- Marital status: Life insurers should not have different rates for married, divorced or single applicants.
- Current life insurance policies: If you already have life insurance, the number of policies you have should not affect your rates. However, you may have to justify purchasing a large amount of coverage across multiple policies.
Life Insurance Rating Classes for Underwriting Definitions
Insurance companies use risk classes to calculate policyholder premiums. The criterion for each class is typically similar from company to company, but specific requirements vary slightly.
Super Preferred Risk Class
Insurers rate people in this category as those with excellent overall health and no hobbies or occupations considered dangerous. Those in this risk class have no history of tobacco use in the past five years or drug or alcohol abuse in the past 10 years. They also have no history of cancer or heart disease. Only a small percentage of applicants qualify for Super Preferred.
Preferred Risk Class
Those people who qualify for this risk class have a similar profile as someone in the Super Preferred class. They’re in good health but might take medication to treat a condition such as high blood pressure or have a family history indicative of risk. People with diabetes or some mental health conditions such as anxiety or depression can still qualify for this class if they are managing their symptoms.
Standard Risk Class
People in the standard class usually have a relatively high body mass index, take multiple medications or have potential health issues. Some risky occupations and lifestyle choices are acceptable, but underwriters want to see that applicants have been non-smokers for at least a year.
Substandard Table Rating
Insurers use a table rating system of letters or numbers to classify policyholders considered a higher risk. It is used for those who have significant health conditions or only a short track record of managing symptoms. Table ratings may come into play when someone has past alcohol abuse or treatment, severe asthma, bipolar disorder, epilepsy, multiple sclerosis or Type 1 diabetes.
Some health conditions can lead insurers to decline coverage completely. For example, current alcohol abuse, cirrhosis, current cancer treatment, drug use, a recent heart attack, HIV, kidney dialysis, or a suicide attempt or mental illness that required hospitalization within the last year often lead to disqualification.
Calculating Your Life Insurance Rates
Once you know your coverage needs, you can obtain a quote to understand your average monthly costs. You can use the calculator below to calculate your life insurance rates by providing information about your coverage requirements and risk factors.
How Can I Lower My Life Insurance Rate?
There are several steps you can take to lower your life insurance rate and potentially save on your policy.
- Non-smokers: Insurers consider it risky to provide a policy to smokers due to a higher risk of lung diseases, heart conditions and cancer. You may qualify for a lower rate if you maintain a tobacco-free lifestyle for around a year or more.
- Manage chronic health conditions: If you have chronic conditions like hypertension, diabetes or high cholesterol, you can lower your premiums by effectively managing symptoms through regular health checkups and following your doctor’s advice.
- High-risk activities: Engaging in high-risk activities like scuba diving or skydiving can affect your risk profile and increase your premium. You might qualify for a lower rate by reducing your participation in these activities.
- Choose the right coverage amount: Estimate your insurance needs carefully and choose a policy that best fits your unique situation, as over-insuring can lead to significantly higher premiums.
- Consider coverage early: If you want term life insurance, opting for coverage earlier in life can help you lock in lower rates for an extended period.
Frequently Asked Questions About Life Insurance Pricing
Ethos provides the cheapest life insurance based on the companies we’ve reviewed, while Bestow is another good option. However, we based our recommendations on average rates. The cost you pay will depend on several factors related to your unique situation.
On average, a 65-year-old man will pay $266 monthly for a policy with $250,000 in coverage. The price will depend on several factors, such as policy type, coverage amount, overall health status, lifestyle and insurance provider. A good first step to estimating your costs is figuring out how much life insurance you need.
Men generally pay more for life insurance because women, on average, have a longer life expectancy. This reduces the likelihood of the insurance provider having to pay out a policy early, thus lowering costs.