When searching for life insurance, the cost is undoubtedly one factor you’ll consider. But policy pricing is complex, even for term life insurance, which is simpler than permanent life insurance. The cost of life insurance depends on a host of variables, including the type of policy you buy, your age, gender, health, lifestyle, medical history, and how much coverage you want.
To help you sort through these factors, we researched rates across more than a dozen insurance companies rated A or better by AM Best. We looked at premiums for policies with different coverage amounts, terms, and applicant ages to give you an idea of how much you can expect to spend—or if you’re currently paying too much. All charts refer to term life policies unless otherwise indicated.
- The average cost for a $250,000 20-year term policy at age 35 is about $14 per month.
- The cost of insurance increases exponentially as you age.
- Women typically pay less for life insurance than men, and the disparity increases with age.
- Smokers in otherwise good physical condition, on average, pay more than overweight nonsmokers with blood and cholesterol issues.
- Whole life policies can be five to 20 times as expensive as term life policies because they’re designed to cover your whole life and include a cash value.
Cost of Life Insurance by Provider
Since each life insurance company has its own criteria for pricing policies, rates between them for the same type of coverage can vary—sometimes significantly. This is illustrated in the following chart, which shows averages of monthly rates quoted for nonsmoker male and female applicants with no health issues for a $250,000 20-year term policy.
|Monthly Rates for a $250,000 20-Year Policy|
|25 years old||35 years old||45 years old||55 years old|
|United of Omaha||$14||$16||$31||$69|
For example, a 35-year-old might pay $20 per month with Prudential but only $13 per month for a similar policy with SBLI. In fact, as you get older, the gap in rates widens, which makes it crucial to shop around, especially at age 45 and above. This is most obvious in the quotes we collected at age 55. The difference between insuring with Prudential, in this case, instead of Banner could be more than $200 a year for the same $250,000 coverage and a 20-year term.
We also found that while some companies had low rates at a certain age, term, and coverage amount, they ended up being among the most expensive as coverage and age changed. SBLI is one example of this. For a 20-year $250,000 term policy, SBLI was among the most affordable for 25-, 35-, and 45-year-olds. But at 55 years old, it was the third most expensive.
Some life insurance quotes point out important features, like the company’s rating and riders that are included or available for an extra cost, such as an accelerated death benefit (ADB) rider or a conversion feature.
Average Cost of Life Insurance by Death Benefit
Besides the individual factors used to determine how much you’ll pay for life insurance, the cost is also affected by the value of the death benefit. We averaged quoted monthly premiums for healthy nonsmoking men and women at different ages across 10 insurers for $100,000, $250,000, and $500,000 policies.
As the death benefit increases, naturally, cost increases with it. The longer you wait to purchase coverage, the more pronounced this effect will be. For example, a 45-year-old will pay $27 per month, on average, for a 20-year term policy with a $250,000 death benefit, and $46 per month for $500,000 worth of coverage. But wait 10 years and the average cost of each policy more than doubles.
Average Cost of Life Insurance by Gender
On average, women live five years longer than men, so, not surprisingly, the average cost of life insurance for males is generally higher than the cost for females. For example, at age 25, males generally pay a few dollars (about 15%) more per month than females for a $250,000 20-year policy. But the price difference grows more significant over time. At age 55, women pay $46 per month, on average, for a $250,000 20-year term policy, while men pay $61—that’s 33% more and works out to $184 more per year.
Average Cost of Life Insurance Based on Health
So far, our data has focused on reasonably healthy nonsmoking individuals. And while that’s a good way to illustrate variations in cost by insurer, coverage amount, and gender, we also need to consider different health situations to understand why your life insurance premiums might be different from the overall average.
Insurers consider your health and whether you smoke to determine which “risk class” to put you in, which indicates how much they’ll charge you for coverage. Risk classes often include the following:
- Preferred plus: Exceptional health history, no medical issues, normal body mass index (BMI) and blood pressure, and no cholesterol issues. If you have had your driver’s license suspended or have been in more than two accidents in the past three years, you probably won’t qualify for this category.
- Preferred: Very good though not perfect health. If you have some medical conditions that you control with medication, you can still qualify in many cases. Dangerous job activities or hobbies may put you in this category even if your health is stellar.
- Standard plus: This category may be used when you have minor health issues and do not qualify for the above qualifications, such as if you have a higher BMI or are overweight.
- Standard (or regular) and other categories: There are multiple other classifications, including “smoker” categories, that an insurer might use based on its underwriting criteria or if you do not qualify for any of the above.
The more information an insurance company asks you to provide, the lower your potential rate. This is because applicants are typically eligible for the best risk classes when they are asked to provide more detailed information.
We researched life insurance premiums for $250,000 20-year term policies for male and female applicants ages 25 to 65, with varying risk classifications (preferred plus, preferred, regular, and preferred smoker). What we found is primarily twofold and not surprising:
- Smokers pay more: We collected quotes for preferred smokers, meaning those who are in reasonably good health and smoke infrequently, and found that even at age 25, male preferred smokers pay about 69% more (around $27 more per month) than their nonsmoking counterparts. Smokers in an otherwise good physical condition also pay more than overweight nonsmokers with blood and cholesterol issues.
- Age exaggerates premium differences between categories: If our male smoker is age 65 instead of 25 but still in good health, he’ll pay $465 more per month to get the same $250,000 20-year coverage as a nonsmoking preferred male—that’s almost $5,600 more per year! But even our preferred female smoker isn’t much better off: She’ll pay more than $4,000 per year for similar coverage.
Some insurers are more lenient with or open to writing policies for people who have health risks, which is another reason it’s important to shop around for life insurance quotes.
John Hancock has multiple programs catering to specific health profiles. It has a plan for Type 1 and Type 2 diabetics, a quit-smoking incentive program (in which it offers participants nonsmoker rates for three years), and a lifestyle- and fitness-based discount program.
Average Cost of Life Insurance by Term Length
How long you want coverage for also affects how much you’ll pay. Term insurance is available through different insurers for terms that are as short as one year and can extend up to 40 years. Premiums vary the most between terms for older applicants.
We averaged the monthly cost of life insurance for healthy nonsmoking male and female applicants for 10-year, 20-year, and 30-year term policies with a $100,000 death benefit. We found that 25-, 35-, and 45-year-olds can expect to pay only a few dollars more per month to bump up from a 10-year coverage term to a 20-year term and also from a 20-year to a 30-year coverage term. However, 55-year-olds can expect their monthly premium to more than double if they’d prefer coverage for 30 years instead of 20.
Eligibility for Longer Term Lengths
When you purchase a life insurance policy, your age and health status at the time of application affect not only your cost but also how long the company will insure you for. For example, most insurers issue a wide range of term policies with periods of up to 40 years. But if you want a 35-year term policy, you’ll need to be in good health and generally no older than 50 to qualify. Twenty-year term policies are only available if you’re younger than 65 (or possibly 70 if you’re in good health). And Banner has a 40-year term policy that’s only available for purchase up to age 45.
Average Cost of Whole Life Insurance
Permanent life insurance, such as universal and whole life insurance, follows a similar pattern. However, these policies are more expensive than term policies because they are designed to last a lifetime. In the following chart, you can see that the cost of permanent insurance rises exponentially as coverage and age increase. A 35-year-old male who wants a $250,000 death benefit might pay $239 per month (and he’ll pay about twice as much for twice the coverage). However, a 60-year-old could pay $785 for the same $250,000 of lifetime coverage—which is more than three times as much per month as the younger man pays, or $6,546 more per year.
If you’re confident that you want permanent coverage, which won’t end after a certain number of years, it almost always makes sense to get it while you’re young. Not only is the cost more manageable, but you could develop one or more health issues as you age that make you uninsurable.
For consumers who want some permanent coverage but can’t afford a permanent policy with enough coverage for their needs, it can make sense to supplement with term insurance. For instance, a 25-year-old man might buy a $100,000 whole life policy for $71 per month and supplement it with a 20-year, $250,000 term life policy for an extra $13 per month. That would give him a combined $350,000 death benefit for $84 per month. This strategy would pay for higher coverage while, say, he’s building a family and has a new mortgage. After the term ends, his children might be grown and his mortgage paid off, so he wouldn’t need to provide as large of a death benefit.
Our research found the average cost of whole life insurance to be around five to well over 20 times as much as a term life policy, depending on the insured’s age, coverage amount, and the term selected. Whole life insurance is more expensive than term because it is a type of permanent life insurance and includes a cash value you can borrow or withdraw from.
Cost of Life Insurance for Children
There aren’t as many options available when it comes to life insurance for children: Fewer companies offer it, and when they do, the death benefit may be capped at $30,000 or $50,000. In other instances, the maximum coverage a child younger than the age of 16 can qualify for is 25% of the caretaker's life insurance coverage. This would include both parents. However, life insurance for kids can be purchased as term coverage—as a rider on a parent’s policy, for example—or as a stand-alone permanent whole life policy.
Like adult insurance, the younger your child is, the lower the monthly premium will be. For example, both Mutual of Omaha and Globe Life offer children’s policies. For $30,000 worth of permanent coverage, you’ll pay around $13 per month (with either insurer) for a five-year-old child and around $18 per month for a 15-year-old. Permanent whole life policies for children also build a cash value that can be accessed during your child’s life.
If you purchase a term rider for your child as an add-on to your own policy, check that the rider has a conversion feature—in other words, make sure your child’s insurance coverage can be converted to a permanent policy once they’re an adult, without proof of insurability.
We sourced quotes and eligibility criteria from more than a dozen life insurance companies using insurer websites, online brokers, and quote comparison websites. Term life rates were collected for females (5'8", 130 pounds) and males (6'0", 170 pounds) who were nonsmokers, taking no medication, had no history of family health issues, and lived in the 90666 zip code.
Preferred plus, preferred, regular, and preferred smoker rates were collected to compare rates based on different health profiles. Children’s life insurance rates do not rely on health questions; rates were taken directly from the life insurer’s own website pricing tables or quotes. The number of insurers used in “average” calculations varied depending on product availability.