2022 Average Life Insurance Rates – Forbes Advisor
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Life insurance can protect your family’s quality of life if you pass away, so it’s wise to consider adding it to your financial portfolio. If you’re worried you can’t afford it, check the actual quotes first.
Finding affordable life insurance is probably easier than you think because many people mistakenly think it’s a lot more expensive than it is. According to a study by LIMRA and Life Happens, two industry-funded groups, more than 50% of people overestimate the cost of life insurance by three or more times the actual amount.
We have analyzed average term life insurance rates by age, term length and payment amount. Your exact cost will depend on your health and age, among other things, but our overview of average life insurance rates will give you an idea of what you can expect to pay.
Average Life Insurance Rates
Life insurance is not unique. Rates vary based on a variety of factors, including the type of policy, term and death benefit you choose, as well as your relevant personal information.
With level term life insurance, your premium will remain the same each year during your life insurance term, so you can count on it to be a fixed part of your budget now and in the future. As you will see below, quotes will increase based on your age when you purchase a policy.
age and gender
- At age 30, term life insurance rates for men are about 19% more expensive than for women, for a $500,000 term policy over 20 years.
- Waiting 30-40 years to buy can increase your quotes by up to 36% more ($408 vs. $300 for a male buyer).
- If you delay buying term life insurance until age 50, quotes can be up to 212% higher than buying at age 30 ($936 vs. $300 for a buyer male).
- Choosing a 20-year term policy over a 10-year policy costs about 40% more ($252 versus $180 for a 30-year-old female) but doubles your time covered by life insurance.
- Choosing a 30-year term over a 10-year term costs nearly 90% more ($336 vs. $180), but triples your years of coverage.
- Choosing a $500,000 policy over a $250,000 policy for a 20-year policy will cost you about 50% more ($252 compared to $168 for a 30-year-old woman), but it will double the payout of your font.
Average term life insurance rates by age
It’s wise to buy term life insurance when you’re younger, before rates go up and your policy options dwindle. With each passing year, your life insurance quotes will increase, even if you are in excellent health. While waiting to take out life insurance, you also run the risk of developing a health condition that will lead to an even higher rate when you take out a policy.
Here we see how life insurance rates for 70 year olds cost over 1000% more than a policy taken out by a 30 year old. It should also be noted that a term of 30 years is generally not available for people aged 60 and over.
Term life insurance rates per year for a 30 year old male
Term life insurance rates per year for a 30 year old woman
Term life insurance rates per year for a 40 year old male
Term life insurance rates per year for a 40 year old woman
Term life insurance rates per year for a 50 year old man
Term life insurance rates per year for a 50 year old woman
Term life insurance rates per year for a 60 year old male
Term life insurance rates per year for a 60-year-old woman
Term life insurance rates per year for a 70 year old male
Term life insurance rates per year for a 70 year old woman
Average term life insurance rates by length of term
The length of your policy will affect rates because the longer the policy lasts, the greater the likelihood that the insurance company will have to pay out. We looked at the average annual rates for 30-year-old men and women who take out a policy with a term of 10, 15, 20 or 30 years.
Term life insurance rates for a 10-year term policy
Term life insurance rates for a 15 year term policy
Term life insurance rates for a 20 year term policy
Term life insurance rates for a 30 year term policy
Average term life insurance rates by payment amount
It is essential to know the amount of life insurance you need. As the amount of the death benefit increases, your costs also increase. We analyzed average annual rates for a 30-year-old at different durations for policy payouts ranging from $100,000 to $3 million.
10-year term life insurance annual rates
20-year term life insurance annual rates
30-year term life insurance annual rates
How life insurance rates are determined
Life insurance companies really want to determine one thing: How long are you likely to live?
The information they gather helps estimate an answer to this complicated question and calculate the cost of your policy.
What you pay for life insurance depends on the type of life insurance you purchase, the amount of coverage you have, your age, health status and company underwriting procedures, among others. Each life insurance company has its own pricing system for a policy, so comparing rates between multiple companies will help you find the best fit for your needs and budget.
Below are 10 factors that can influence your life insurance rates.
- Age: One of the most important factors in calculating rates. As you get older, the likelihood that the insurer will have to pay increases, leading to higher quotes.
- Genre: Women have a longer life expectancy and will therefore generally pay less than men of the same age and health.
- Height and width: If your height and weight are within certain limits, you will receive better rates than if you are considered overweight or underweight, both of which can lead to health problems.
- Past and current health: Your health condition significantly affects your rates. Pre-existing conditions are taken into account to determine if they will reduce your life expectancy.
- Family medical history (siblings and parents): If your family medical history shows serious illnesses, especially hereditary illnesses, you may be in for higher quotes.
- Nicotine and/or marijuana use: Smokers, other nicotine users (including vaping and the patch), and marijuana users have a higher risk of developing cancer and respiratory diseases, so they will be cited at higher rates.
- History of substance abuse: Drug or alcohol abuse can shorten your life expectancy, leading to higher life insurance premiums.
- Driving record (especially DUI and speeding tickets): Driving under the influence, driving at high speeds and/or causing accidents puts you at higher risk and leads to increased rates.
- Credit: Credit is a factor in some risk scores used by life insurers.
- Criminal historyy: Having a crime on your record can impact your ability to get a police. Even if you can buy a policy, a crime will generally increase your costs, especially if you have served time as your life expectancy has likely decreased.
Beyond the factors above, a main factor influencing what you will pay is the type of life insurance policy you choose.
Life insurance comes in two main types: term life insurance and permanent life insurance. Permanent life has the advantage of lasting until your death, but it is generally more expensive than other types of life insurance. Term life is a more popular choice due to its affordability.
Term life insurance rates are for healthy non-smokers of average height and weight. We averaged the four cheapest quotes we found online. Your own rates will be different depending on your age, health, driving record and other factors.
Compare life insurance companies
Compare policies with the 8 major insurers
Life Insurance Average Rates FAQ
Does Your Credit Affect Life Insurance Rates?
Expect insurance companies to eventually perform a soft credit check to review the details of your credit report for anything that might give them pause. For example, if you go bankrupt, it can increase your risk and affect your life insurance quotes. The score itself may or may not be used, depending on the life insurance company’s scoring system.
Also, some companies use credit scores, or elements of credit reports and other reports, to predict life expectancy “mortality” and they sell this information to life insurance companies. For example, LexisNexis, an analytics company, offers its risk classifier score, and TransUnion, a news and information company, has TrueRisk.
At what age should you buy term life insurance?
There is no ideal age to buy life insurance, but a good rule of thumb is to buy life insurance as early as possible when you need it.
Buying term life insurance when you’re younger (and healthier) can guarantee you a reasonable cost for the duration of your policy. If you find you need more life insurance as you get older, you can always buy additional coverage or try laddering life insurance.
Who pays more for life insurance, men or women?
If all other factors are equal, men generally pay more for life insurance due to shorter life expectancies than women. We found that, on average, for a $500,000 term life insurance policy over 20 years, 30-year-old men paid about 20% more than women. For the same policy at age 50, men pay 30% more than women.
There is an exception in Montana, which requires gender-neutral life insurance rates.