Are you shopping around for a life insurance policy? The right coverage can provide peace of mind and security for your family. But before you commit to a policy, it’s smart to find out how much you can expect to pay. That way, you’ll know which offers are good deals and which ones are overpriced. Read on to learn the average life insurance cost for every demographic.
What is the average cost of life insurance?
It all depends on who is asking and the type of insurance you are shopping for. The overall average cost of a $250k life insurance policy for a healthy adult under 70 years is around $67.88 per month. However, the exact cost of your insurance premiums depends on several different risk factors. You could find yourself paying more or less than the average, depending on your:
- Policy length
- Policy size (i.e., how much coverage you purchased)
- Medical history.
- Unhealthy habits (e.g., smoking cigarettes)
Let’s dig a little deeper.
What is the average life insurance cost for your demographic?
To find out how much you can expect to pay in life insurance premiums, view the charts below:
Average life insurance cost by gender
In general, men pay slightly more than women for life insurance. Understandable, because women tend to live longer than their male counterparts.
For more specific details on what you can expect, view the charts below:
|Age||Policy value||Male premium||Female premium|
|30 years||$250k policy||$200.15||$175.28|
|40 years||$250k policy||$293.66||$254.72|
|50 years||$250k policy||$645.83||$512.17|
Average life insurance cost by age
The older you are, the shorter your remaining life expectancy. For this reason, older policyholders pay higher premiums than those who invest in life insurance young.
|25 years old||$25.67|
|30 years old||$26.20|
|35 years old||$29.80|
|40 years old||$38.14|
|45 years old||$59.78|
|50 years old||$91.53|
|55 years old||$146.39|
|60 years old||$245.81|
|65 years old||$473.66|
Average life insurance cost by the length of the policy
Your life insurance term length determines how long your life insurance policy will continue to pay out after your demise. As such, if you take out a plan with a longer-term length, you’ll have to pay higher premiums.
|10-year term – Monthly premium||20-year policy term – Monthly premium|
|Policy value||Smoker||Nonsmoker with some health issues||Nonsmoker with no health issues||Smoker||Nonsmoker with some health issues||Nonsmoker with no health issues|
Source: John Hancock, New York Life, Securian, Transamerica, and ValuePenguin.
Frequently asked questions about the average cost of life insurance
Which factors affect the average cost of life insurance?
‘The following factors can raise or lower the cost of your life insurance payments:
- Length of policy. Lifelong vs. set term
- Smoker vs. Nonsmoker
- Preexisting health conditions
- Family medical history
- Employment. A skydiving instructor will pay more than an office worker.
- Lifestyle. Dangerous hobbies like free-climbing and scuba diving raise your premiums
- Riders and other add-ons
What are life insurance riders?
“Riders” are additional benefits that you can pay to append to your life insurance policy. Examples include the following:
- Accelerated death benefit pays out early in the case of a terminal illness.
- Waiver of premium for disability waives your premium costs if you become disabled and are no longer able to work.
- Long-term care pays out for in-home nursing and other necessary end-of-life care.
How much does smoking affect the cost of life insurance?
Unfortunately, cigarettes have an enormous impact on the cost of your life insurance. Policyholders who smoke cigarettes can expect to pay more than four times the amount of an equivalent non-smoking policy. View the chart below for more detail:
|Age||Nonsmoker monthly premium||Smoker monthly premium|
|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|
How can you lower your life insurance premiums?
Many of the factors which influence life insurance, such as your age or your family’s medical history, are out of your control. But there are factors that you can target to lower your life insurance costs.
As discussed above, cigarette smoking has an enormous impact on the cost of your life insurance premiums. Quitting can cut down your premiums by 75% or more. And if you’re of above-average weight, tackling an exercise program that will lower your BMI can also help.
You can also adjust your policy to reflect your current lifestyle. For example, if your children have moved out and support themselves, you can afford to lower your coverage.
How much life insurance do you need?
There isn’t a single answer to this question. One popular rule of thumb is seven to 10 times your current salary. But that may not be an accurate estimate of what you and your loved ones need. It all depends on your personal family and financial situation. First, take a look at your family’s monthly expenses. Add the cost of basic living necessities like food, utilities, and rent (or home insurance), plus any outstanding debts (like a mortgage or auto loan). Don’t forget to account for future costs, like college tuition for your kids. How much income do your surviving relatives require to cover these expenses?
When considering the length of your policy, think about the people who will survive you. Does your spouse have an income stream of their own? If not, do they have relevant work experience or marketable skills?
Also, are your surviving dependents adept at budgeting? Even if you’ve built up a healthy nest egg, but your spouse or children are not good at managing money, that financial security may not last long. If you want to keep costs low, you can set up a policy that ends around the time that your youngest child graduates college and becomes self-supporting.
The right life insurance policy for you depends on your family’s cost of living. The appropriate term will depend on how long it will take for your surviving relatives to become financially independent.
How does gender affect your life insurance cost if you are transgender?
Most life insurance companies set your policy based on your gender identity, not the one assigned to you at birth. In regards to your physical build and health appraisal, most life insurance companies have a unisex build chart that they use to set standard rates. If you are nonbinary, your life insurance company will likely set your rates using this chart.
Ready to get started? You can compare top life insurance companies side-by-side here. Consider how much life insurance you need before you apply. That way you can avoid the risk of a company selling you more coverage than you really need. Also, don’t commit to a policy before you’ve compared at least three different offers.