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What’s the average cost of life insurance?
Life insurance costs as little as $16 a month — especially if you're young and healthy.
Updated . What changed?
Because life insurance rates are tailored to the individual, it’s difficult to nail down an average monthly cost. But we can give you a general idea of the typical life insurance policy costs for a few demographics.
What's in this guide?
- What's the average life insurance cost?
- Find out how much life insurance will cost for you
- WATCH: The true cost of life insurance
- What factors affect my life insurance rates?
- How much life insurance do I need?
- How can I get the cheapest life insurance rates?
- Myths about life insurance costs
- Bottom line
What’s the average life insurance cost?
For a healthy person between 18 and 70 years old, life insurance costs an average of $67.88 a month for a 20-year, $250,000 policy. You can get a free life insurance quote to find out the exact life insurance rate you’ll pay. Your rates will ultimately reflect your age, health and lifestyle.
Compare average cost of life insurance rates for a healthy non-smoker based on age.
|Age||Gender||$250,000 coverage||$500,000 coverage||$1,000,000 coverage|
Find out how much life insurance will cost for you
Get an online quote in minutes from top life insurance companies. Compare multiple quotes to find the best rate for you.
WATCH: The true cost of life insurance
Watch our short video where we breakdown what goes into how much you’ll pay for your policy.
What factors affect my life insurance rates?
Life insurance companies categorize you by how risky you are to insure using life insurance classifications. Since most rates depend on the factors listed here, you can take steps to reach a rate class with better rates, like quitting smoking.
To determine your premium, your insurer will assess the following:
- Type of policy. Term life insurance is temporary, so it costs six to 10 times less than permanent policies, such as whole life. Along with offering lifelong coverage, permanent policies have a savings component and become a cash asset over time.
- Amount of coverage. A $1 million policy will be more expensive than a $250,000 or $500,000 policy, and so on.
- Riders. Most insurers charge a fee to add optional extras to your policy, such as a waiver-of-premium rider or accelerated death benefit rider.
- Your age. The older you are, the lower your life expectancy — which is why insurers reserve their best rates for young applicants.
- Your gender. Studies show that women tend to live longer than men, so insurers charge women lower premiums. The reason is simple: There’s less of a chance they’ll need to pay out your policy.
- Your smoking status. Since smoking is linked to a host of health issues, smokers almost always pay more for coverage.
- Your health. Your insurer will look at preexisting health conditions and high cholesterol or blood pressure levels when setting your premium.
- Your family medical history. If you have a family history of serious health conditions like cancer, stroke and heart disease, your insurer will probably raise your rates.
- Your occupation. If your work puts you in dangerous situations — for instance, miners, firefighters, exterminators or roof contractors — you’ll likely pay more than someone with an office job.
- Your lifestyle. Underwriters assess your driving record, alcohol and drug use, whether you participate in high-risk hobbies — like aviation or scuba diving. Applicants who lead safe lifestyles are rewarded with better premiums.
Cost of life insurance for people over the age of 70
It’s possible to get life insurance after 70, but your options will be limited, and you can expect to pay substantially more for coverage. A person in their 80s can expect to pay more than $1,000 a year for a $10,000 or $20,000 final expense or guaranteed issue policy. You’ll skip the medical exam in exchange for higher rates and lower maximum coverage.
Most life insurance companies stop offering term life insurance at 75 or 80 years old, and permanent coverage at around 75 years old. However, each insurer has its own underwriting guidelines, so that doesn’t mean you’ll automatically be denied if you’ve passed the 75-year mark.
How much life insurance do I need?
To determine how much coverage you need, think about your financial obligations now and in the future. When you’re crunching the numbers, factor in the following:
- Your income. If you were to die unexpectedly, how would your family cope without your income? Look for life insurance policies that are enough to replace your income until any debts are fully paid.
- Your expenses. Do you own a mortgage, car loan, credit card or other debts? Calculate the ongoing expenses your family requires to maintain their current and future lifestyle.
- Your dependents. If your family includes people who depend on you financially, consider their future needs. For instance, your children will likely go to college, or elderly parents might need care. Factor in any expenses your family depends on.
- Your assets. Evaluate your stock shares, savings and retirement accounts and investment properties. Can your family comfortably live off these, or would you rather they continue letting those investments build?
Use our life insurance calculator for a quick estimate on how much coverage you might need.
How can I get the cheapest life insurance rates?
Your overall medical history and other factors may be out of your hands. But there are a few things you can do to potentially lower your premium.
- Quit smoking. If you’re a smoker, a logical step to reduce your premium — and improve your health — is to kick the habit as soon as you can. Doing so can help you avoid rates that are double or more that of a nonsmoker.
- Cut down on drinking. A few drinks won’t have much of an effect on your rates. But if you tend to enjoy more than a drink a day, consider reducing your alcohol intake for lower rates.
- Get in shape. Insurers consider your weight and how much you exercise an important part of determining risk. A lower BMI typically results in cheaper rates.
- Consider major life changes. Your life insurance policy should change with your needs. For instance, if you just had your first kid, a 20-year term policy should cover your family until after your children are grown and supporting themselves. Or consider laddering policies based on debts, like a 30-year term life policy for your mortgage and a 15-year term policy to get you to retirement.
- Look for discounts. A trick to keeping more money in your pocket is to look for opportunities to save. Talk with your insurer about the possibility of cheaper premiums with a family or joint policy, rather than an individual plan.
Myths about life insurance costs
Life insurance is a simple concept, pay now to protect your family later. But many people opt out of life insurance because they don’t understand how it works. The most common myths about life insurance include:
- Life insurance is too expensive. It might sound difficult to factor in premiums for yet another insurance plan. But life insurance can be a safety net that prevents your family from dealing with debt and unnecessary hardship after you die. You can keep premiums low by buying only the coverage you need.
- It’s a waste of money. Life insurance is designed to protect those you love in times of need. Consider how your family would cope if you die. A life insurance policy could help them keep up with mortgage repayments, credit card debt and ongoing expenses.
- Whole life insurance is a good investment. While the cash value component can be useful for people who’ve maxed out their other investments, your return on investment will typically be much lower than investing in stocks, bonds and funds. Be careful if a life insurance adviser claims whole life is a good investment and do your own homework to find out if it’s right for you.
- Applying for coverage isn’t worth it. It’s true that many insurance companies require a medical exam and in-depth underwriting processes. But if you’re signing up for long-term or whole life, the peace of mind that your family is protected could outweigh the one-time hassle. You’ll also find insurers offering policies without medical exams with quick approval, though often with higher premiums.
Life insurance rates are personalized, and can vary wildly. When you apply for a policy, your insurer will take your age, gender, health, family medical history, occupation, lifestyle and driving record into account. To ensure you’re getting the best possible premium, compare life insurance companies.
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