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Average Life Insurance Costs

Data & Guides Money Average Life Insurance Costs

Life insurance is a pivotal protection plan for your family’s finances during tragic circumstances. However, almost half (48%) of the U.S. population is without the safeguard of a life insurance policy. In addition to this, 41% of adults, both insured and uninsured say they don’t have sufficient life insurance coverage. [1] LIMRA, “New Study Shows Interest in Life Insurance at All-Time High in 2023” https://www.limra.com/en/newsroom/news-releases/2023/new-study-shows-interest-in-life-insurance-at-all-time-high-in-2023/

Although policyholders are on the rise in recent years, there are still plenty of people without the security of insurance. [2] LIMRA, “2023 Marks Third Consecutive Year of Record Sales for U.S. Individual Life Insurance” https://www.limra.com/en/newsroom/news-releases/2024/limra-2023-marks-third-consecutive-year-of-record-sales-for-u.s.-individual-life-insurance/

A 30-year-term life insurance policy costs $36.51 per month on average for a 40-year-old with a $250,000 payout amount, according to a study carried out on behalf of Self Financial.

Life insurance can vary in price depending on your lifestyle and what company you choose. Monthly premiums fluctuate depending on the coverage amount, age, smoking status, gender, and term length.

Key statistics

Average cost of life insurance by age

Age is an impactful part of life insurance criteria. Correlation in recent data shows that the older a person is, the more expensive their policy is likely to be.

It makes sense that policies become more expensive for older enquirers. An older person has an increased likelihood of health issues, which can raise the risk for the insurance company.

Let's compare 30-year-olds, 40-year-olds, 50-year-olds, and 60-year-olds' life insurance policies.

Average cost of life insurance by age
Men Women
30-year-olds $27.23 $22.46
40-year-olds $43.93 $32.64
50-year-olds $82.80 $65.18
60-year-olds $123.85 $89.71

30-year-olds

The average monthly premium for a 30-year-old male is $27.23, and for a 30-year-old female, it's $22.46 for policies with coverage of $250,000 and a term length of 30 years.

Beginning a life insurance policy from a younger age can make the cost cheaper. This reflects the lower health risks associated with younger age. [3] Progressive, “When to Get Life Insurance” https://www.progressive.com/answers/when-to-get-life-insurance/ However, you may be earning less in your 30s than you will in your 40s or 50s, so a life insurance policy may cost a smaller percentage of your income as you get older.

40-year-olds

The average monthly premium for a 40-year-old male is $43.93, and for a 40-year-old female, it’s $32.64 for policies with a 30-year term length.

This increase is due to the higher health risks associated with aging. [3] Progressive, “When to Get Life Insurance” https://www.progressive.com/answers/when-to-get-life-insurance/ When comparing 40-year-olds to 30-year-olds looking to take out a 30-year life insurance policy, the difference is significant with it being more than $10 more expensive for the average male each month.

50-year-olds

The average monthly premium for a 50-year-old male is $82.80, compared to $65.18 for a 50-year-old female, for policies with coverage of $250,000 and a term length of 30 years.

The older the potential policyholder is, the more expensive the quote due to the increase in health risks as we age. [3] Progressive, “When to Get Life Insurance” https://www.progressive.com/answers/when-to-get-life-insurance/

60-year-olds

For a person taking out life insurance at age 60, the average monthly premium exceeds that of any other term length. The average monthly premium for a 60-year-old male is $123.85 compared to $89.71 for women.

This is for a policy with a coverage of $250,000, one of the smaller payout options for life insurance.

Taking out an insurance policy at 60 years old or older most certainly brings higher costs due to the increased likelihood of health issues. The MSD Manual (The Merck Manuals) reveals a number of health issues that occur in older individuals, including doubled body fat by 75 years old, subsequently resulting in an increased chance of diabetes. The data also reveals potential health problems across the board as we age, with effects on the brain, nervous system, and eyes. [5] MSD Manuals, “Changes in the Body with Aging” https://www.msdmanuals.com/home/older-people%E2%80%99s-health-issues/the-aging-body/changes-in-the-body-with-aging It’s therefore logical that the premium will be more expensive as it becomes riskier for the insurance firm. These figures highlight the importance of securing life insurance early to lock in lower rates and ensure financial protection for your loved ones.

Life insurance costs by term length

Term lengths for policies range from 10 years to 30 years. The longer the term, the more the premiums will cost. Let’s take a look at the average cost of life insurance by term length.

Average life insurance cost by term length
Men Women
10 years $18.83 $16.91
20 years $24.94 $21.07
30 years $43.93 $32.64

10-year term

For a 10-year term policy, the average monthly premium for a male is $18.83, while for a female, it's $16.91. You’ll struggle to find shorter terms than ten years, but generally, these policies are more affordable than longer life insurance terms.

Women have lower premiums across all types of life insurance policies.

20-year term

The average monthly premium for a 20-year term life insurance policy is $24.94 for men, whereas for women, it's $21.07.

This increased cost reflects the extended coverage period and increased risk. When looking at 20-year terms, they are more costly than shorter-term options.

30-year term

The average monthly premium for a male is $43.93, while for a female, it's $32.64. The data suggests that longer policies cost more, and this is down to the increased risk for companies as there is a higher risk of developing health issues the older we get. [6] Life Happens, “Why Life Insurance is Worth Your While at Any Age” https://lifehappens.org/blog/why-life-insurance-is-worth-your-while-at-any-age/

These averages clearly show how term length affects life insurance costs, underscoring the importance of finding a balance between affordability and the desired coverage duration. It should be noted that although a shorter term length will be cheaper to start with, it could cost you more if you have to renew your policy or take out a new one later in life.

Life insurance costs by coverage amount

The amount of coverage selected for a life insurance policy significantly impacts the monthly premiums.

Look below for an overview of the ranging costs for men’s life insurance and the average across the different payout amounts. These quotes are based on 40-year-old policyholders.

Average life insurance costs by coverage amount
Men Women
$250k $43.93 $32.64
$500k $73.61 $56.05
$1M $135.35 $103.25
$2M $266.78 $202.08

Similarly, the premium price for women also increases as the coverage amount rises.

Here’s a detailed breakdown based on the latest data:

$250,000 coverage

For a $250,000 policy, the average monthly premium for a man is $43.93, while for a woman, it's $32.64. The study shows that there’s a $11.29 difference between the average for men and women.

$500,000 coverage

Increasing the coverage to $500,000 raises the average premiums by 51% for men and 53% for women. The average monthly premium for a 40-year-old man with $500,000 coverage is $73.61, whereas for a 40-year-old woman, it's $56.05.

$1,000,000 coverage

The average monthly premium for a male is $135.35, while for a female, it's $103.25. This significant coverage amount can often be chosen to ensure substantial financial security for beneficiaries.

For million-dollar policies, customers will be required to spend a lot more on their monthly premiums.

$2,000,000 coverage

The average monthly premium for a male is $266.78, compared to $202.08 for a female. This highest coverage amount provides extensive financial protection but comes with a much higher cost.

These averages clearly show the impact of coverage amount on life insurance costs.

Regardless of what coverage amount somebody is looking for, it’s wise to compare quotes from different insurers so you can find the best rate for the coverage you need.

The cost of life insurance by smoking status

Lifestyle is a factor that life insurance firms consider when processing a quote. Smokers can pay a lot more for protection.

Average life insurance costs by smoking status
Men Women
Smoker $127.06 $96.51
Non-Smoker $43.93 $32.64

Male smokers pay 189% more

Male smokers pay an average of $127.07 per month for a $250,000 policy, while non-smoking males pay $43.93 per month for the same coverage on a 30-year term plan.

All quotes collected in this study were more expensive for smokers than non-smokers with insurers adding a significant amount to the monthly premium due to the added risk of ill health from smoking. Data from the CDC shows that 480,000 deaths are caused by smoking, showing an increased chance of mortality. [4] CDC, “Health Effect of Cigarette Smoking” https://www.cdc.gov/tobacco/data_statistics/fact_sheets/health_effects/effects_cig_smoking/index.htm

Male smokers looking for a 30-year policy will pay almost three times more than non-smokers on their monthly premium according to this study done on Self’s behalf.

Female smokers face a 196% increase

Data collected for Self shows that female smokers face similar increases, with premiums averaging $96.51 per month compared to $32.64 for non-smoking females.

This demonstrates the significant difference in the price that women who smoke have to pay for their life insurance premiums.

Best policy options for smokers

Smokers may benefit from shorter-term policies to minimize costs. Additionally, shopping around for the best rates and considering policies with lower coverage amounts can help manage expenses.

Smokers consistently pay significantly higher premiums across all term lengths and coverage amounts. This underscores how smoking can impact your ability to secure more affordable life insurance coverage.

What impacts the cost of life insurance?

The cost of life insurance is influenced by several key factors such as age, lifestyle, payout amount and gender.

Age

Age is a primary determinant of life insurance costs, the older the policyholder at the time of taking out the policy, the more expensive the premiums.

For instance, a 30-year-old male pays an average of $26.04 per month in contrast to 50-year-olds who spend $123.85 on monthly premiums. A 30-year-old taking out a 30-year policy would be 60 at the end of their policy, whereas a 50-year-old would be 80 with a higher risk of health issues, which could impact the higher cost of coverage.

Smoking status

Smoking status drastically affects the life insurance premiums collected in this study. Male smokers pay 186% more for a 30-year term $250,000 policy. Male smokers pay an average of $119.75 per month for a $250,000 policy, while non-smoking males pay $41.82 per month for the same coverage on a 30-year term plan.

Gender

Gender also impacts life insurance rates, with women generally paying less than men. For a $250,000 policy, 30-year-old women pay an average of $21.69 per month, compared to $26.04 for men.

The disparity becomes more evident as plans become more expensive, for instance, 60-year-olds taking out life insurance is hugely different for men and women. A 60-year-old man will pay $123.85 on average and $89.71 for a woman.

Coverage amount

A $250,000 policy costs a 40-year-old male $41.82 per month, whereas a $500,000 policy costs $66.89. Similarly, for a 40-year-old female, a $250,000 policy costs $31.20, while a $500,000 policy costs $52.68.

The study shows the fluctuation in quote prices on a ten-year basis but policies will change according to your age regardless.

Term length

Term length affects the cost significantly. A 30-year term policy costs more than a 10-year term. For instance, a 30-year-old male pays $19.39 per month for a 10-year term but $43.93 for a 30-year term. Again, it’s important to remember that a shorter term length might be cheaper to start with, but if you need to renew your coverage or get a new policy after the 10 years, this may end up costing you more in the long run.

These factors collectively determine life insurance premiums. By understanding and evaluating these elements, you can make informed decision

What doesn’t affect your life insurance premium?

There are many misconceptions about what will affect your life insurance policy price. Ethnicity, beneficiaries, marital status and other factors are not considered by insurance companies. These factors were not requested by insurance companies when life insurance quotes were collected for this study.

Sources [7] Investopedia, “Discrimination in Insurance Underwriting Guidelines” https://www.investopedia.com/insurance-underwriting-guidelines-discrimination-5203311 [8] SelectQuote, “Best Life Insurance for Spouses” https://www.selectquote.com/life-insurance/articles/spouse-life-insurance [9] Bankrate, “How Much Does Life Insurance Cost?” https://www.bankrate.com/insurance/life-insurance/life-insurance-cost/#what-doesn-t-impact-your-life-insurance-premium

Do you need life insurance?

Determining whether or not you need life insurance comes down to an individual’s financial situation and their beneficiaries.

Life insurance is in place to protect and comfort those left behind. Insurance eliminates some risks and provides a safeguard for dependents such as children or a spouse. A life insurance payout might enable dependents to cover costs such as paying off a mortgage so they can continue to live in their family home.

Another benefit of having life insurance is that families can use it to cover the costs of the funeral, an already painful and challenging task without the burden of a substantial cost.

Methodology

Quotes were collected from the following life insurance companies in July 2024:

These sites were selected based on the U.S. News list of Best Life Insurance Companies. Researchers were unable to collect a quote from every site on the list, so SelectQuote was included as an additional quote provider as it compares life insurance quotes from different companies.

Quotes were requested using different criteria including gender, age, term length, payout amount, and smoking status. An average cost was then taken from the five insurance sites to give a price for life insurance in each category. All quotes except age-specific ones were collected for a 40-year-old person.

Sources

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