What Is the Average Cost of Life Insurance?

Is the average cost of life insurance worth the extra money every month? To know that, you have to know what kind of plan you want.

When buying life insurance, the policy size, the policy length, and a lot of other things decide the cost. Knowing those help you make the best decision for you and your family.

Without life insurance, your family can be left in a financial lurch. It’s important to weigh these decisions carefully and understand every aspect of the decision.

Below, we’ve broken down the average costs by the most important factors. Keep reading to learn all you need to know before buying life insurance! 

Cost by Age

It shouldn’t come as a surprise that your age affects life insurance prices. As you age, your life expectancy decreases.

That means rates increase as you age. There’s an increase of about 86% for ages 60 to 65. That comes out to be another $275 per month.

The following price ranges reflect a 20-year term and a death benefit of $500,000.

For a non-smoking 25-year-old, the monthly life insurance cost is around $31. It jumps up to an average of $86 for smokers.

A 30-year-old can expect to pay about $33 or $92 if they smoke. For the added 5 years, a 35-year-old would pay $38 or $117 for smoking.

Ages 40 to 45 pay $50 to $78 for their life insurance policies. Meanwhile, 50-year-olds’ costs rise to $118.

Ages 55, 50, and 65 see the biggest price jumps. They can expect to pay $190, $318, and $593, respectively.

Cost by Gender

On average, women pay less for term life insurance than men do. Men pay around 23% more.

So, a 30-year-old female with a $250,000 value pays around $18. A 30-year-old male pays around $21 for the same policy value.

Cost by Policy Size

Your policy size, or policy’s face value, is what determines how much your beneficiaries receive once you die. It’s essential to choose the right amount so your family is covered properly.

A life insurance policy of $100,000 costs an average monthly rate of $20. For $250,000, that rate rises to $36.

At $500,000, expect to pay about $60 a month. A $1 million life insurance policy size costs $116 a month.

Cost by Policy Length

Another factor that impacts the cost of your life insurance is the term length. Shorter ones are less expensive.

The following term rates are broken down by rating classifications. You’re subjected to a medical exam to find out more about your health and history.

You’re then put into a classification based on how healthy or unhealthy you are. These classifications are as follows:

  • Standard
  • Preferred
  • Preferred Plus

The monthly cost of these 10-year life insurance policies valued at $100,000 would be $22, $19, and $16. A $250,000 one is $37, $28, and $23.

For a $500,000 policy value, you’ll pay $61, $44, and $35. A $1 million policy value costs $110, $76, and $59.

If you’re interested in a 20-year life insurance policy, it increases only a few dollars a month compared to the 10-year.

You can see how living a healthier lifestyle leads to an increase in savings. Your health rating has a massive effect on the cost.

So, Is the Average Cost of Life Insurance Worth It?

Some find the average cost of life insurance too expensive to see the value in it. It depends on your family situation.

If you bring in the primary income for your household, your family struggles when you pass away. Your family is also responsible for all funeral arrangements.

The best strategy is to buy it when you need it. It protects your family from financial distress. For more content like this, continue reading our financial blogs!

Last Updated on January 18, 2023

Usama BIN Safdar
Meet Usama Bin Safdar, a wordsmith hailing from Faisalabad, Pakistan. With over 5 years of experience under his belt, he's a master at weaving words to create content that's not only informative but also engaging. He's a deep-diver when it comes to SEO, and as the Founder of SoftwareBench, he helps businesses and individuals navigate the digital landscape with ease. Follow Usama for a journey into the world of SEO and digital marketing, where every word is crafted with precision and passion.

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