Life insurance companies mostly base their rates on your age and health status, but they also factor in your job, your weight, whether you smoke and even your family health history. Unlike other kinds of insurance, life insurance quotes aren't affected by your location. At ValuePenguin, we've compiled rates for a variety of policy types and customer profiles to calculate the average cost of life insurance.
Average term life insurance rates by age
We started our evaluation by showing the change in average life insurance rates for different age groups. Life insurance companies will use age as a determinant for life insurance premiums. Rates will continue to increase as you age due to a decrease in your total life expectancy.
The term life insurance quotes below are for a 20-year term life insurance policy with a death benefit of $500,000.
Through our findings, you can see that the increase in monthly premiums as you age is much smaller if you are young, compared to when you are older. For example, the average life insurance quote only increases by 2% between ages 25 and 30, but it jumps much higher between ages 60 and 65 — an average increase of 93%, or $227.85.
|Age||Monthly life insurance cost (nonsmoker)||Monthly life insurance cost (smoker)|
|25 years old||$25.67||$86.23|
|30 years old||$26.20||$92.14|
|35 years old||$29.80||$118.36|
|40 years old||$38.14||$183.87|
|45 years old||$59.78||$281.94|
|50 years old||$91.53||$441.69|
|55 years old||$146.39||$689.91|
|60 years old||$245.81||$1,076.23|
|65 years old||$473.66||$1,644.78|
As you can see, differences in premiums are even greater if you smoke. Smokers, on average, pay premiums that are 306% higher for life insurance policies when compared to an applicant who is a nonsmoker.
Average cost of life insurance by gender
Besides age, life insurance quotes will vary depending on your gender. On average, men will pay 24% more for term life insurance than women.
This is due to life expectancy because men tend to have a shorter life expectancy compared to women. Life insurers take this into account and thus will charge a man more expensive rates than a woman who is the same age.
|Age||Policy face value||Male premium||Female premium|
Compare life insurance estimates from top providers in your area
Term life insurance rates by policy size
Your life insurance policy's face value, which is the face value that would be paid to your beneficiaries when you die, is essential to your financial planning. For this reason, you should carefully evaluate and calculate the correct face value depending on your assets and future expenses. By choosing an accurate face value for your life insurance policy, you can adequately provide for your loved ones.
Term life insurance rates by policy length
The tables below detail quotes for 10- and 20-year term life policies. As you can see, the shorter the term length, the cheaper life insurance premiums you will have to pay each year.
We have broken down the premiums by each rating class. A rating classification is the health rating that the life insurance company will assign to you after you have taken a medical exam. The rating you receive will directly affect the premium that you will pay for your life insurance policy. These metrics are determined by each individual life insurance provider but only vary slightly across the industry. We have provided a detailed description of the different classifications here.
10-year term life insurance rates
People who are on a tight budget may prefer 10-year policies because they offer some of the cheapest rates available. Furthermore, a 10-year policy can be useful for someone who may not require long-term insurance.
|Policy face value||Preferred plus||Preferred||Select||Standard|
20-year term life insurance rates
The most popular term life insurance option on the market, the 20-year term policy, provides longer coverage than its shorter-term 10-year counterpart, though it comes with higher annual rates.
These policies are usually recommended for young families who often have large debts and expenses, such as mortgages and school loans, that would become extremely burdensome if the breadwinner of the family happened to die unexpectedly.
The 20-year term is typically long enough for the family to substantially pay down these debts and reduce the potential risk of someone else having to foot the bill should something happen.
|Policy face value||Preferred plus||Preferred||Select||Standard|
Generational views about the cost of life insurance
ValuePenguin conducted a survey which revealed that more than a third (35%) of the total respondents did not currently have a life insurance policy.
When pressed about what the main reason was behind this decision, over 40% of individuals believed that it is too expensive to purchase life insurance. Furthermore, over half (53%) of baby boomers (adults between the ages of 54 and 72) think policy premiums are too steep and thus do not currently have life insurance. Investing in a policy when young can be cost-effective, and boomers are feeling the effects, like price, of not purchasing life insurance until later in life.
However, when asked, "When should you purchase a life insurance policy?" over 37% of total individuals responded "While you are young and healthy."
Views as to when prospective policy holders should purchase life insurance?
|Life event||Generation Y||Millennial||Generation X||Baby boomer||Silent generation|
|After the birth of first child||20%||16%||20%||11%||16%|
|Once you are married||18%||16%||15%||17%||0%|
|While you are young and healthy||27%||35%||36%||42%||47%|
|After buying your first home||8%||10%||4%||4%||11 %|
|When you reach retirement age||7%||6%||7%||8%||5%|
|When you get your first full-time job/promotion||8%||11%||11%||6%||11%|
Is buying life insurance worth it?
For most people, the answer to this question depends on their family situation. Life insurance is most important for those who are the primary or only breadwinners for their household. If anything should happen to you, the supporting income that you earn will be difficult for your family to replace if you don't have sufficient coverage.
How much does life insurance cost for a family of four?
We've found that the average cost of life insurance is about $126 per month, based on a term life insurance policy lasting 20 years and providing a death benefit of $500,000. You should think of this number strictly as a baseline - your own rates for life insurance will change depending on your age, the insurer you choose and the amount of coverage that you find is right for your family.
At what age should I get life insurance?
Since the cost of life insurance rises the older you get, the most cost-effective strategy is to buy it as soon as you know that you need it. For most people, that moment arrives when they get married or have a child, but coverage can become necessary in any situation where you know that someone else will be relying on you financially.
Average life insurance rates by age were calculated based on quotes from five of the largest insurers: John Hancock, MassMutual, New York Life, Securian and Transamerica. Costs shown are for a man in excellent health. Additionally, gender life insurance rate charts used the same insurers and included applicants in excellent health.
Data from this study showing the cost by policy term length was sourced from Northwestern Mutual Life Insurance. Life insurance figures were calculated by looking at four policy amounts ($100k, $250k, $500k, and $1 million) across four rate classes. Below is the breakdown of each rate class:
Preferred plus policies assume no tobacco use in five years, no serious medical issues, cholesterol levels below 200 and blood pressure that doesn't exceed 130/80.
Preferred policies assume no tobacco use in three years, above-average health, no serious medical issues, cholesterol levels below 240 and blood pressure that doesn't exceed 135/85.
Select policies assume no tobacco use in 12 months, good health, blood pressure below 140/90 and cholesterol levels below 300.
Standard policies assume tobacco use in the past year, good health, cholesterol below 300 and blood pressure readings below 140/90.
ValuePenguin by LendingTree commissioned Qualtrics to conduct an online survey of 1,029 Americans to understand their feelings towards life insurance. The survey was fielded May 24-27, 2019.