Our take
Life insurance is an affordable and effective way to ensure your family's financial health is protected if the unexpected happens. However, the cost of life insurance is influenced significantly by your age and health. The younger and healthier you are when you purchase a policy, the lower your premiums will be, which makes early planning crucial. By securing life insurance now, you lock in lower rates and provide lasting financial security for your family.
Average life insurance rates
Average life insurance rates vary widely based on factors like age, health, coverage amount, and type of policy. The rates can be higher for older individuals or those with health issues. It's essential to shop around and get quotes from different insurers to find the best rate for the policy you need.
Average term life insurance rates
Here’s a look at the average rates for term life policies to show how age, length of policy and health status influence the cost of life insurance.
Average life insurance cost by age
Here's the annual life insurance cost by age for a nonsmoking woman classified as Regular health status for a $500,000 20-year level term life policy.
| Age | Average annual rate | Lowest rate | Highest rate |
|---|---|---|---|
| 25 | $436 | $320 | $1,065 |
| 30 | $465 | $337 | $1,115 |
| 40 | $719 | $502 | $1,540 |
| 50 | $1,532 | $1,140 | $3,170 |
| 60 | $3,809 | $2,930 | $8,580 |
Source: CompuLife, August 2023
Average life insurance cost by gender
Here's the annual life insurance cost for a nonsmoking man and woman classified as Regular health status for a $500,000 level term life policy.
| Age & gender | Average annual rate | Lowest rate | Highest rate |
|---|---|---|---|
| 25-year-old woman | $436 | $320 | $1,065 |
| 25-year-old man | $537 | $377 | $1,225 |
| 30-year-old woman | $465 | $337 | $1,115 |
| 30-year-old man | $561 | $407 | $1,265 |
| 40-year-old woman | $719 | $502 | $1,540 |
| 40-year-old man | $879 | $645 | $1,700 |
| 50-year-old woman | $1,532 | $1,140 | $3,170 |
| 50-year-old man | $2,016 | $1,511 | $4,225 |
| 60-year-old woman | $3,809 | $2,930 | $8,580 |
| 60-year-old man | $5,461 | $4,223 | $12,515 |
Source: CompuLife, August 2023
Average life insurance cost by policy type
Here's the annual life insurance cost by policy type for a nonsmoking 40-year-old woman classified as having regular health status for a $500,000 20-year term life policy.
| Policy Type | Average annual rate | Lowest rate | Highest rate |
|---|---|---|---|
| Level term | $719 | $502 | $1,540 |
| To age 70 level guaranteed | $782 | $760 | $805 |
| To age 75 level guaranteed | $922 | $849 | $995 |
| To age 75 level gauranteed | $2,098 | $1,051 | $3,146 |
| Return of premium | $2,718 | $2,020 | $3,575 |
Source: CompuLife, August 2023
Average life insurance cost by health status
Here's the annual life insurance cost by health status for a nonsmoking 40-year-old woman at various health classifications for a $500,000 20-year level term life policy.
| Health status | Average annual rate | Lowest rate | Highest rate |
|---|---|---|---|
| Preferred plus | $326 | $277 | $400 |
| Preferred | $433 | $345 | $510 |
| Regular plus | $555 | $442 | $680 |
| Regular | $719 | $502 | $1,540 |
Source: CompuLife, August 2023
Average life insurance cost by term length
Here's the annual life insurance cost by term length for a nonsmoking 40-year-old woman classified as Regular health status for a $500,000 level term life policy.
| Term length | Average annual rate | Lowest rate | Highest rate |
|---|---|---|---|
| 20-year term | $502 | $347 | $1,220 |
| 30-year term | $719 | $502 | $1,540 |
| 30 year term | $1,097 | $844 | $2,215 |
Source: CompuLife, August 2023
Average life insurance cost by amount of coverage
Here's the annual life insurance cost by amount of coverage for a nonsmoking 40-year-old woman classified as having regular health status for a 20-year level-term life policy.
| Coverage | Average annual rate | Lowest rate | Highest rate |
|---|---|---|---|
| $100,000 | $257 | $168 | $449 |
| $200,000 | $440 | $249 | $814 |
| $400,000 | $641 | $410 | $1,548 |
| $500,000 | $719 | $502 | $1,540 |
| $1 million | $1,224 | $912 | $2,590 |
| $5 million | $5,708 | $4,239 | $12,360 |
Source: CompuLife, August 2023
What affects the cost of life insurance?
There are a number of factors that affect life insurance rates, including:
- Age and gender
- Health status
- Lifestyle, including smoking, drinking and dangerous hobbies
- Occupation
- Type of policy
- Length of policy
Rates vary between 10-, 20- and 30-year terms. Shorter-term life insurance policies have lower premiums than longer-term policies. For instance, a 10-year policy will be cheaper than a 20-year term life policy.
However, permanent life insurance coverage, like whole life, typically costs more than term life.
"Whole life insurance -- policies that never expire -- will be the most expensive," says Zach Keefer of Voyage Retirement Solutions.
In fact, whole life insurance can cost five to 15 times more than a term life insurance policy with the same death benefit. But it can be well worth it, depending on your family situation and financial goals.
Other types of permanent life insurance, like universal life, are also more costly than term life because your loved ones are guaranteed a death benefit when you die and those policies have cash value.
What’s the best time to buy life insurance?
If you're wondering when you should buy life insurance, the answer is as soon as possible. Age is the number one factor in determining life insurance rates by a long shot, Keefer says.
"The older you are, the more you'll pay across the board."
Plus, if you have children, getting coverage when they’re younger and more financially dependent on you is vital.
As you age, you can still find affordable life insurance. The key is getting several quotes from insurers and comparing the costs for different policies. And if you're much older without young dependents, you may want to look into final expense coverage.
"It's important to seek the help of a trusted financial professional to ensure you're adequately covered and can make the most of your policy," Ball says.
How to lower life insurance rates
Regardless of when you buy life insurance, saving money when you can is a good idea. Though you can't control factors such as your age or gender, you can take steps to help lower your rates. Here are a few ideas.
- Buy early - The younger you are when you buy, the less you will pay for life insurance, so don’t wait.
- Choose the right type of policy - Picking a policy can be confusing, and some people end up with the wrong type of insurance that costs more than necessary. Get expert help.
- Improve your health - Your health also makes a big difference in the cost of your policy. If your weight is considered unhealthy, do what you can to lose weight. And if you're still smoking, consider quitting.
How much life insurance do I need?
Most people rely on life insurance proceeds to cover funeral expenses, medical bills, mortgage and debt payments, child care, and other major expenses they may not be able to afford if the primary breadwinner dies.
So, how much insurance coverage do you actually need? For most people, a common guideline is 10-12 times your annual income.
Of course, that's just a guideline. For instance, you may need even more coverage if you have a particularly expensive mortgage or are putting your kids through an Ivy League.
However, seniors may not need that much insurance. The same is true if you have little debt or no dependents.
In that case, calculate how much your family would need to cover funeral costs and medical expenses, plus a little extra.
"A life insurance agent or other financial professionals can help people determine what level of protection is right for them and their families based on their financial responsibilities, sources of income and savings," Bayerle says.
Frequently asked questions: Life insurance rates
Is buying life insurance worth it?
As long as you choose a policy that fits your needs and budget, life insurance is generally well worth the cost, says Keefer.
"Unexpected things happen to families all the time and you don't want to put your family in a financial hole if the worst-case scenario happens," he says.
How much should you spend on life insurance?
You should spend what you can afford, but make sure that you’re getting as much coverage as you can for your money. If you’re on a tight budget, the premiums can seem like a difficult expense to manage. But remember that it will only get more expensive as you get older.
It’s important to make sure you can afford the premiums, as non-payment will result in a lapsed policy.
How do you buy life insurance?
Buying life insurance is similar to most other types of insurance. Research to find out what kind of policy you need, shop around and compare quotes and then apply for the policy you want. You can buy life insurance through an agent or online, depending on the type of policy you need.
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