Average Cost Of Life Insurance In 2023: Rates By Age And Term

The average cost of life insurance nearly doubles every decade you age, so those who put off getting coverage because they think it costs too much might end up paying too much because they take out a policy in their 60s.

The sooner you get coverage, the less you will pay in monthly premiums. But even then how do you choose between term life insurance and whole life insurance? We’ll explain the different types of insurance policies, how the rates are determined, and how you can lower your costs.

Several factors influence the cost of life insurance such as:

1. The type you choose: term or whole,
2. Your age
3. Your health
4. Your gender
5. The coverage amount
6. Whether you pay until age 65 or 99 for a whole policy
7. Whether you want a term policy that converts
8. The riders you add

Average Term Life Insurance Rates by Age

Term life insurance provides coverage for a set period, or term. You can choose term lengths and coverage amounts.

Term life insurance is the most popular form; 48% of Americans have it with an average coverage amount of $110,000.

Term Life Insurance Rates per Year for a 30-Year-Old Male

The table below provides average monthly premiums for a 30-year old male, no health problems, no history of genetic conditions, with various levels of coverage.

Men are twice as likely as women to have life insurance.

Term Life Insurance Rates per Year for a 30-Year-Old Female

The table below provides average monthly premiums for a 30-year old female, also with no health problems, no history of genetic conditions, with the same levels of coverage.

The younger you are when you take out a term policy, the healthier you will be, and the less expensive your premiums will be as a result. 60% of people who don’t buy life insurance avoid a policy because they are worried about the cost.

Taking out things like 10-year term policies to cover a 10-year debt can cost the same as a Netflix subscription for men and women.

Term Life Insurance Rates per Year for a 40-Year-Old Male

The table below provides average monthly premiums for a 40-year old male, with some mild insomnia and above-average blood pressure, no history of genetic conditions, with several levels of coverage.

As you can see when comparing the two tables, prices jump significantly for the longer term policies and specially for the higher coverage.

Term Life Insurance Rates per Year for a 40-Year-Old Female

The table below provides average monthly premiums for a 40-year old female, with some mild insomnia and above-average blood pressure, no history of genetic conditions, with the same levels of coverage.

As you can see when comparing the two tables, female prices are, on average, one quarter of the cost less than the comparative male prices.

Term Life Insurance Rates per Year for a 50-Year-Old Male

The table below provides average monthly premiums for a 50-year old male, with some mild sleep problems and above-average blood pressure, with the three levels of coverage for comparison.

As you can see in this table, it starts to become more difficult to find quotes for a longer, 40-year term policy once you reach 50 because most insurance companies want the length of the term to expire around the age of 70 or 75 owing to the fact that significant health complications tend to arise thereafter, which are insufficiently covered by the term premiums.

Term Life Insurance Rates per Year for a 50-Year-Old Female

The table below provides average monthly premiums for a 50-year old female, with some mild sleep problems and a history of depression, with the three levels of coverage for comparison.

This is the age at which you stop seeing as many term policies available.

Term Life Insurance Rates per Year for a 60-Year-Old Male

The table below provides the average monthly premiums for a 60-year-old male, with some blood pressure issues in his past, and no history of serious diseases in the family.

As indicated in the table above, if you wait to take out a policy or a replacement policy for a previous term by the age of 60, you are limited to a maximum of 20 year policies for most companies.

Term Life Insurance Rates per Year for a 60-Year-Old Female

The table below provides the average monthly premiums for a 60-year-old female, with some blood pressure issues in his past, and no history of family diseases.

Term Life Insurance Rates per Year for a 70-Year-Old Male

Once individuals reach the age of 70, taking out new policies becomes much more limited. The table below indicates what policies are available, and at what monthly premium for a 70-year-old male:

Term Life Insurance Rates per Year for a 70-Year-Old Female

The table below indicates what policies are available, and at what monthly premium for a 70-year-old female:

Once you turn 70, it becomes decidedly more challenging to find a policy, not just an affordable policy. several of the term lengths are no longer available and the costs for minimum term lengths go up substantially.

Average Whole Life Insurance Rates by Age and Pay Schedule

Whole life insurance is a form of permanent coverage. Once you take out a policy, assuming you pay your premiums every month or year, your policy will remain in effect until you pass away and the death benefit is paid out to your beneficiaries.

22% of people choose permanent life insurance policies over term policies so they can build wealth to leave behind for their families.

The Average Cost of Whole Life Insurance by Age

Below is the average monthly costs for male and female buyers of a whole life insurance plan:

As indicated by the average costs, you can expect policies to nearly double in cost every decade.

Average Annual Whole Life Insurance Rates for a $250,000 Policy

Below is a table comparing the average monthly premiums for a $250,000 whole life insurance policy at different stages:

Whole Life Insurance Rates Payable Until Age 65

When you purchase a whole life insurance policy, insurers usually give you the option of picking to pay premiums until you turn 65 or until you turn 99.

This does not mean that your coverage expires when you turn those ages, but it does contribute to the cost of your monthly premiums. If, for example, you are only paying premiums until you turn 65, your premiums will be higher because there’s less time to pay what should roughly be the same cost.

Below is a table comparing the average monthly premiums for three levels of coverage based on different ages and genders:

Whole Life Insurance Rates Payable Until Age 99

Whole life insurance policies that are payable until 99 cost an average of 1/3 that of policies payable through age 65 depending on the age at which the policy is purchased.

Below is a table comparing the average monthly premiums for three levels of coverage based on different ages and genders, for policies payable until 99:

As you can see by comparing the two tables above, the average monthly premium is significantly less for policies that are payable until age 99.

A 55 year old female taking out a new policy might expect to pay a little over $800 per month for $500,000 in coverage if payable until 99. But that same policy would cost nearly $3,000 per month for a policy only payable until age 65.

The reason being, that individual would only be paying into her life insurance for 10 years with the second policy, but paying into it for 30 years with the first.

Average No-Medical-Exam Term Life Insurance Rates by Age and Coverage Amount

For those with pre-existing conditions or lifestyle risks, a no medical exam term life insurance policy might be a better option. These policies refer to previous medical records rather than a current physical to assess your health and provide you with a policy.

No-Medical-Exam Term Life Insurance Rates by Age

The table below provides the average rates for different age groups and coverage amounts using a no medical exam term policy:

No-Medical-Exam Term Life Insurance Rates by Coverage Amount

The table below provides the average monthly premiums based on coverage amounts and term lengths:

Transgender Applicants and Life Insurance

There are challenges regarding life insurance policies for transgender applicants gender plays a significant role in determining the premiums. No company can deny you coverage because you are transgender but the underwriting process can be complicated.

Many life insurance companies underwrite a policy based on gender that is assigned at birth but others can use the gender applicants state when applying.

There are also health conditions that affect transgender individuals more than the general population and that can make monthly or annual premiums more complex to determine and higher than the general population such as:

• Medication use
• Surgical history
• HIV
• Higher cholesterol because of hormone therapy
• Blood clots or anemia because of hormone therapy
• Ulcers
• Emphysema

At present there is a lack of established protocol on gender for transgender applicants across the industry so the individual guidelines are set by insurance companies. Below are a few companies that generally accept applicants regardless of their gender identity:

• AIG
• MassMutual
• Mutual of Omaha
• State Farm
• Nationwide
• Guardian Life
• Liberty Mutual Group

The Average Cost of Term Life Insurance by Health

When life insurance companies review your application, they give you a risk class based on things like hobbies, occupation, family health history, health, and age.

Your risk class can be:

1. Super preferred, the healthiest and lowest risk, sometimes called ‘Preferred Plus’
2. Preferred
3. Standard

Many life insurance companies also have different health classifications for people who are smokers. The risk falls below standard

Super preferred has the lowest risk level and the lowest premiums. Preferred has the second lowest premiums, and standard has an average risk level with the third lowest premiums.

The table below indicates the comparative costs for different risk classes in a 40 year old female and male:

Each of these risk classes applies to a non-smoker but someone with several chronic conditions who is a smoker might pay between 25% and 100% more than what is listed under the standard monthly premiums.

While there isn’t a significant difference between super preferred and preferred, those who fall under standard risk categories can see between a 30% and 40% increase in their monthly premiums.

Average Life Insurance Cost by Company

Costs vary significantly based on the aforementioned factors, however the table below indicates the average monthly life insurance for a 35-year-old female for a 20 year term policy.

How Are Life Insurance Rates Calculated?

Actuarial tables are used to calculate life insurance rates. These use mathematical formulas to determine at what age you are likely to pass away based on things like your health, lifestyle, and age.

Life insurance is a business and in order for the business to stay afloat, they have to bring in enough money to compensate for the money they pay out in the form of death benefits for all of their policyholders.

The amount of money you pay in monthly premiums goes toward offsetting the potential cost the insurance company would pay out in the event of your death. So, if you have a higher chance of a premature death, they will increase your premiums so that you pay more money toward offsetting that cost compared to someone who has a much longer life expectancy.

Factors Influencing the Cost of Life Insurance

Several factors influence how much life insurance costs.

Type of policy

As indicated in all of the tables above, a whole life insurance policy or permanent policy is more expensive than a term policy.

Coverage amount and term

If you take out a term policy, the longer the term length, the higher your premiums. At the same time, the higher your coverage amount, the higher your premiums.

Health and demographics

Health and similar demographics play a significant role in the cost of your life insurance policy. People in poor health can expect significantly higher premiums to compensate for the health risks.

Your lifestyle

Lifestyle is taken into account when determining life insurance costs. For example, people who engage in risky hobbies like rock climbing or skydiving can expect to pay higher premiums again, to compensate for that risk.

Credit-based insurance score

In many cases your credit score is taken into account as well. higher credit scores indicate more financial stability and therefore some reduced risk where certain lifestyle and health factors are concerned.

Policy features

Policy features will influence the cost as well. if you pick a term policy, for example, but you pick one with a convertible option or a return of premium option, you can expect to pay higher premiums compared to a traditional term policy. Whole life insurance policies with riders will also increase costs.

Age

Age is one of the most significant factors; the older you are the higher your health risks and your risks of developing other health complications so the higher your premiums.

Gender

Men pay more compared to women no matter the type of policy or age at which it is activated.

Family history

Family history is reviewed when you take out a policy. If you have a family history of certain genetic health conditions, that can increase the cost because it puts you at a higher risk of developing severe complications that might result in a payout sooner rather than later.

Coverage amount

Coverage amounts can range from $100,000 all the way up to a few million dollars. The higher your coverage amount, the higher your premiums.

What Does Not Impact Your Life Insurance Rates?

While there are several factors which influence the average cost of life insurance in 2023, there are several items which don’t:

• Race: Race is not a factor in a life insurance policy.
• Ethnicity: Ethnicity is not a factor in providing coverage.
• Sexual orientation: Sexual orientation does not influence costs, only gender.
• Marital status: Marital status plays no role in your individual policy.
• Where you live: Life insurance coverage is based on individual information like health and age, but not where you live.
• The number of beneficiaries you have: Some life insurance companies will limit the number of beneficiaries you can have, while others don’t. In either case, it does not influence rates.
• The number of policies you have: You can have several policies and prices are not increased for new ones.

How Much Life Insurance Do You Need?

64% of Americans believe that you should take out life insurance to cover existing debt.  This is one of the biggest factors in determining how much life insurance you need.

• If you are taking out a term policy you need to consider what current financial obligations you want to cover with that policy amount and how long the obligations will last. The length of those obligations should correspond to the term length you choose.
• If you are taking out a whole policy, you can consider any financial obligations, money you might want to set aside for education or living expenses, as well as a potential inheritance.

When Is Life Insurance Worth the Cost?

There are several situations where life insurance might not be worth it. If you are young, single, have no one who is dependent on you, or have enough money for your family, you might not need life insurance. However, there are several situations where life insurance is absolutely worth the cost.

Funeral Costs

Final expense policies or term life insurance policies can cover the cost of your funeral expenses. Funeral expenses for simple funeral services and burials can cost between $8,000 and $12,000.

If your family would be unable to cover this cost without incurring additional debt, life insurance can be worth it.

Financial Dependents

If you have people who depend on you financially, a term or even permanent policy is worth the cost. This can include:

• Disabled children
• Older parents
• Spouses and children

Debt

If you have current debt which would become a financial burden to your family if they no longer had your income or contributions, life insurance is worth the cost. Term life insurance in particular can be worth covering specific debt in the event that you pass away unexpectedly.

Income Replacement

If you are the primary breadwinner for your family you should consider a life insurance policy that would act as income replacement. Life insurance can serve as valuable protection financially if your family wouldn’t have money to survive on in the event that you passed away.

Education

If you have children for whom you are providing an education or for whom you want to provide an education moving forward, life insurance can be worth the cost of knowing that there will be enough money left behind in the event of an unexpected death.

How to Save Money on Life Insurance and Lower Your Premiums?

If you are worried about the cost of life insurance, there are several things you can do at various stages to save money and lower your premiums:

Buy Early

As indicated in all of the tables above, prices go up substantially the older you are. If you buy insurance when you are younger, you can save a lot of money overall.

Buy What You Need

Similarly, the tables above all indicate that the higher the coverage amount you have, the higher your premiums. If you don’t need $1 million dollars worth of coverage, stick with what you need and your premiums will be much lower.

Maintain Good Health

It’s important that you maintain good health. if you know that you are about to apply for a policy, do things like quit smoking, reduce your alcohol consumption, and lose a few extra pounds if necessary. Small steps that you can take in the 6 months or one year prior to your medical exam for a policy can make a substantial difference in the premiums you pay.

Compare Quotes

Be sure to compare quotes. When you shop around for different life insurance policies, you might need to find a company that is more friendly toward transgender applicants, has affordable child riders, offers discounts if a spouse takes out a policy, or is favorable to people with pre-existing conditions.