When looking for life insurance, the cost is undoubtedly one of the factors you will consider. But policy pricing is complicated – even for term life insurance (which is simpler than permanent life). The cost of life insurance depends on a range of variables, including the type of policy you buy, age, gender, health, lifestyle, medical history, and how much coverage you want.
To help you sort through these factors, we’ve researched rates across more than a dozen insurance companies rated A or better by AM Best. We’ve looked at policy premiums 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 noted.
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- The average cost for a 20-year policy of $250,000 at age 35 is about $14 per month.
- The cost of insurance increases exponentially as you age.
- Women usually pay less for life insurance than men, and the disparity increases with age.
- Smokers who are in good physical condition, on average, pay more than non-smokers who are overweight and have problems with blood and cholesterol.
- The cost of a life insurance policy can be 5 to 20 times the cost of life insurance policies because it is designed to cover your entire life and includes a cash value.
The cost of life insurance by the provider
Since each life insurer has its own standards for pricing policies, the rates between them for the same type of coverage can vary – sometimes dramatically. This is illustrated in the following graph, which shows the quoted average monthly rates for male and female non-smoking applicants with no health problems for a $250,000 20-year policy.
The cost of life insurance by the provider
Since each life insurer has its own standards for pricing policies, the rates between them for the same type of coverage can vary – sometimes dramatically. This is illustrated in the following graph, which shows the quoted average monthly rates for male and female non-smoking applicants with no health problems for a $250,000 20-year policy.
- Monthly rates for a 20-year policy of $250,000
- 25 years 35 years 45 years 55 years
- Signboard $12 $13 $24 $53
- protected $12 $13 $24 $53
- owner $12 $13 $25 $54
- Pacific life $12 $13 $25 $56
- SBLI $12 $13 $25 $66
- Lincoln $13 $13 $25 $58
- Haven Live $13 $14 $27 $60
- incurred $13 $16 $29
- Omaha federation $14 $16 $31 $69
- precaution $18 $20 $31 $70
* Bestow has not created quotes for 20-year policies for 55-year-olds
For example, a 35-year-old might pay $20 per month with Prudential, but only pay $13 per month for a similar policy with SBLI. In fact, as you get older, the price gap widens (making it necessary to shop, especially at 45 and over). This is most evident in the quotes we collected at age 55. The difference between insurance with Prudential, in this case, rather than Banner might be more than $200 a year for the same $250,000 of coverage and a 20-year term.
We also found that while some companies have lower rates for a certain age, term, and amount of coverage, they end up being among the most expensive as coverage and age change. SBLI is one such example. For a 20-year policy of $250,000, the SBLI was among the most expensive policies for people ages 25, 35, and 45. But at 55 years old, he was the third most expensive.
Some life insurance quotes indicate important features, such as a company rating and passengers that are included or provided for an additional cost, such as an ADB rider or property transfers.
The average cost of life insurance by death benefit
Besides the individual factors used to determine how much you will pay for life insurance, the cost is also affected by the value of your death benefits. We calculated the average monthly premiums for healthy, non-smoking men and women of different ages across 10 insurance companies for $100,000, $250,000, and $500,000.
As the death benefit increases, of course, the cost increases with it. The longer you wait to buy coverage, the more pronounced this effect will be. For example, a 45-year-old would pay $27 per month, on average, for a 20-year policy with $250,000 in death compensation, and $46 per month for $500,000 coverage. But wait 10 years, and the average cost per policy will more than double.
The average cost of life insurance by gender
On average, women live five years longer than men, so it is not surprising that the average cost of life insurance for males is generally higher than 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 becomes more significant over time. At age 55, women pay $46 a month, on average, for a 20-year $250,000 policy, while men pay $61 — 33% more, working an additional $184 a year.
The average cost of life insurance based on health
Classification Categories
- Favorite Plus: Exceptional health history, no medical issues, normal body mass index (BMI) and blood pressure, and no cholesterol issues. If your driver’s license has been suspended or you’ve had more than two accidents in the past three years, you probably won’t qualify for this category.
- Preferred: very good health, although not perfect. If you have certain medical conditions that you control with medication, you can still qualify in many cases. Even if your health is excellent, dangerous activities or hobbies may put you in this category.
- Standard Plus: This category can be used when you have minor health issues and do not qualify for the above qualifications, such as if your BMI is higher or you are overweight.
- Standard (or Standard) and Other Categories: There are many other classifications, including “smoker” classes, which an insurance company may use based on their underwriting criteria or if you do not qualify for any of the above.
