Ever heard the advice, “Buy life insurance while you’re young?” That’s because the younger you are, the more affordable your premiums will be, since age is one of the biggest factors that affects your life insurance rates.
So what else influences the price of your life insurance? How much does the average policy for life insurance cost? Let’s start with the basics.
What is a life insurance premium?
A life insurance premium is the amount you pay for your life insurance policy. You typically pay a monthly premium, although some insurers offer annual or quarterly payment schedules. You can often get a discount if you pay your premium annually.
Your premium is based on personal factors, such as your age and health, and policy factors, such as the coverage amount and term length you choose. With most life insurance plans, your premium will remain the same for the entire length of the policy.
Paying your insurance premium on time is important to keep your life insurance policy active. There’s usually a short grace period if you miss a payment, but if you continue to miss your premium payments, then your policy will end.
How much is the average life insurance premium?
The average life insurance cost varies based on your age, health, lifestyle, the type of policy, and any additional riders you select. In general, most people think life insurance costs more than it does. According to an industry study, more than half of Americans overestimate the cost of life insurance by three times the actual amount.
Wondering how different types of policies compare cost-wise? Here’s a look at some average rates by insurance type.
Average term life insurance rates by age
Term life insurance is a good option if you’re seeking budget-friendly financial protection for your family. With term life, you can get the coverage you need for a set number of years. Once the term ends, your policy ends, too. That’s why it’s so affordable – you buy it and hope you won’t have to use it later.
So how affordable is it? With Fidelity Life, a 35-year-old nonsmoking man in good health could buy a $500,000, 10-year policy starting around $25 per month, or about $300 per year. The rate is a little less for a 35-year-old nonsmoking woman in good health, who could pay around $282 a year.
10-year term life insurance rates
Here’s what a person in good health could pay for a RAPIDecision® Life 10-year term life policy.
| Face Amount | $100,000 | $250,000 | $500,000 | |||
|---|---|---|---|---|---|---|
| Age | Male | Female | Male | Female | Male | Female |
| 25 | $13.05 | $12.18 | $16.10 | $14.79 | $23.06 | $20.88 |
| 30 | $13.14 | $12.18 | $16.10 | $15.01 | $23.06 | $21.32 |
| 35 | $13.49 | $12.96 | $16.97 | $16.31 | $25.23 | $23.49 |
| 40 | $13.92 | $13.49 | $18.92 | $17.84 | $28.71 | $26.97 |
Rates as of 2023
Average permanent life insurance rates
The premiums for permanent life insurance are higher than term life, for a couple of reasons. First, permanent life insurance lasts for your entire life as long as you keep up with the premiums. These plans also come with a cash value component that you can access while you’re still living. For some people, those features justify the additional costs.
Generally, premiums for permanent life are many times higher than term life plans for the same coverage amount. For example, Consumer Reports notes that a 35-year-old nonsmoking man in good health could pay nearly $4,500 a year for a $500,000 whole life policy – many times more than term life.
Average final expense life insurance rates
Final expense is a type of permanent life insurance, which makes it more expensive than term life, but it comes in lower coverage amounts to make it a relatively affordable option. With Fidelity Life, a 60-year-old nonsmoking woman in good health could pay $528 a year for a $10,000 final expense policy.
Average accidental death benefit insurance rates
Accidental death benefit (ADB) insurance is typically less expensive than term or permanent life insurance policies. Since your loved ones only receive a payout from ADB insurance if you die in an accident, you pay lower rates than you would for a policy that covers more causes of death. It’s available as a standalone policy, or you can often add an ADB rider to your term life insurance policy.
How are life insurance rates determined?
Life insurance premium rates are based on a number of factors, including your age, gender, health, lifestyle, and the type of coverage you want. While a life insurance quote gives you a good idea of the price you’ll pay, an insurer will finalize your rate based on your individual situation. Here are a few of the areas that go into determining your rates.
Policy type and coverage amount
Policy type and term length: A term life insurance policy is generally the most affordable option and will cover you for a certain time period, typically between 10 and 30 years. The shorter your term length, the less you’ll pay for your policy. A permanent policy, which covers you for your entire life, will cost more than a term policy for the same coverage amount.
Amount of benefit: The coverage amount, or payout, refers to the amount of money that your beneficiary receives from the policy when you die. If you choose a higher benefit, your premiums will go up, too. However, the difference in premiums between a $250,000 and a $500,000 policy, for example, is often just a few dollars a month. It’s important to select the payout that will provide your family with the right amount of financial protection.
Age & gender
Curious about life insurance rates by age and gender? You’ll typically pay more for coverage the older you get, and those rate increases get larger as you get older. Buying sooner rather than later can save you hundreds or even thousands of dollars over the life of your policy, especially if you choose a 20- or 30-year term.
Women tend to pay less than men, since they have longer life expectancy. To see how the rates break down, here’s a life insurance rates by age chart for a 20-year term life insurance policy with Fidelity Life for a nonsmoker in good health:
20-year term life insurance rates
Here’s what a person in excellent health could pay for a RAPIDecision® Life 20-year term life policy.
| Face Amount | $100,000 | $250,000 | $500,000 | |||
|---|---|---|---|---|---|---|
| Age | Male | Female | Male | Female | Male | Female |
| 25 | $15.57 | $14.88 | $21.53 | $18.27 | $34.37 | $26.97 |
| 30 | $15.57 | $15.05 | $21.75 | $18.71 | $34.80 | $27.84 |
| 35 | $16.27 | $16.01 | $23.06 | $21.32 | $36.54 | $32.19 |
| 40 | $18.10 | $16.79 | $27.62 | $25.23 | $46.55 | $40.02 |
Rates as of 2023
Health status
Along with your age, your health is one of the biggest factors in your final policy price. Your current health, medical history, and any chronic conditions are all areas insurers will consider to determine your life insurance rates. If you’re young and in good health, your rate will likely be low. Even if you’ve had health issues or currently have a chronic condition, though, there are policies available for you.
How to lower the cost of life insurance
Life insurance premiums may not cost as much as you think. Still, you want to make sure you’re not paying more than you need to. Here are some ways to save:
- Buy life insurance when you’re young: The younger you are when you buy life insurance, the lower your premiums will be.
- Buy term life insurance: Term life insurance is the most affordable coverage out there, since you’re just paying for protection during the years you need it.
- Take a medical exam: Opting out of the medical exam can save you time, but choosing medically underwritten life insurance can save you money. With Fidelity Life, you have up to six months after buying coverage to take an exam, and you may be able to skip it completely.
- Quit smoking: The premiums for smokers are higher than the premiums for non-smokers, since smokers are often at higher risk for diseases and death.
- Compare rates online: It’s easy to compare quotes online for different insurance plans to see which is the best deal for you. With Fidelity Life, you can get a personalized quote in less than a minute by answering a few simple questions.
Commonly asked questions about life insurance rates
How to use life insurance premiums to build cash value
Cash value insurance is a type of permanent life insurance that builds cash value over time. When you pay your premiums, part of the payment goes to fund your cash value and part of it goes toward your death benefit.
It typically takes a few years for cash value to build up on your policy. After that, you can withdraw the cash while you’re still living or even use it to pay your policy premiums. Keep in mind that if you don’t pay back the money, it will reduce the death benefit your family receives later.
Will taking a medical exam lower life insurance rates?
Since health status is a factor in determining life insurance rates, a medical exam showing good health could lower your life insurance premium. If you’re not comfortable taking a medical exam, you can look for life insurance with no medical exam requirement.
At what age can you get the best life insurance rates?
Generally, the younger you are, the less a life insurance policy will cost. That means opting for a policy in your 20s or as soon as you have financial responsibilities is the smartest way to save money on life insurance.
Still have questions about life insurance rates?
Give one of our agents a call at (866) 912-7775 or see how much you might pay for a policy.
At Fidelity Life, our goal is to make life insurance simple, affordable, and understandable for everyday families. This content is intended for educational purposes only. Each post is carefully fact-checked, reviewed, and updated regularly to ensure the information is as relevant as possible.
