How Much is Life Insurance in December 2024?

The average life insurance cost per month for one person is $18. This life insurance policy cost is based on quotes for a healthy 40-year-old man purchasing a $250,000 10-year term plan.

Various factors affect life insurance premiums — insurance companies consider age, health, gender and lifestyle when calculating rates. The type of policy and coverage amounts also influence the cost of life insurance. Understanding how these personal characteristics affect life insurance prices can help you make more informed decisions as you plan for your future.

Life insurance is a financial product that aims to provide beneficiaries a payout, a death benefit, upon the insured's death. There are primarily two types of life insurance: term and permanent. Term life insurance provides coverage for a specific period, often resulting in lower premiums because it does not accumulate cash value. In contrast, permanent life insurance, including whole life policies, offers lifelong coverage and a cash value component, leading to higher costs.

The average cost of life insurance can vary significantly based on several factors. For a 40-year-old nonsmoking man in excellent health with a $250,000 10-year term policy, the average cost of life insurance per month is $18. In comparison, a woman of the same age and health profile would pay around $16 monthly for the same policy. Life insurance pricing varies significantly based on individual circumstances, including gender, with women generally paying less due to longer life expectancy.

To find the best prices for life insurance for your individual needs, consider comparing quotes from several providers. This can help you compare costs and comprehensively view the available options.

Insurance providers evaluate a range of factors to determine premiums on life insurance. Common factors they consider include:

Given each person's situation, reviewing personal needs and comparing multiple life insurance quotes is important to secure the best possible rates.

While many personal characteristics influence the cost of life insurance, several factors typically do not impact premiums. Among these non-influential factors are:

Understanding what does not affect life insurance premiums can allow you to focus on the factors that do matter, such as age, health, lifestyle, coverage amount and policy type.

Term life insurance is one of the most common types of life policies because of its straightforward nature and affordability. Term life insurance prices depend heavily on factors like the insured's age, health status and the duration of the term policy. Rates typically increase with the applicant's age, as older people present a higher risk to insurers.

Designed to provide financial protection for a specific period, such as 10, 20 or 30 years, term life insurance is especially favored by those needing coverage for set obligations like mortgage payments or educational expenses for dependents. Its cost-effectiveness makes it an attractive option for young families and individuals seeking significant coverage without a hefty premium.

Age significantly influences rates for term life insurance, as older individuals present a higher risk to insurers, resulting in increased coverage costs. The probability of health issues, which escalates with age, further amplifies this risk.

For a 10-year term policy with $250,000 in coverage, a 30-year-old man would pay an average monthly life insurance cost of $14. In contrast, a 60-year-old man would pay $76 per month, amounting to $744 more per year than a 30-year-old would pay for the same life insurance policy. A 70-year-old man would face an even higher premium of $204 per month, or $2,448 per year.

The age-related increase in premiums underscores why you may want to consider buying life insurance at a younger age, when life insurance prices are generally more affordable, and you can lock in the coverage at a lower rate.

Please refer to our term life insurance rates by age chart below for a detailed look at the average cost of life insurance by age group.

Gender plays a role in determining life insurance premiums, often resulting in men paying more than women. This difference is primarily due to actuarial life expectancies; on average, women tend to live longer than men.

Insurance companies use this data to assess risk. Since men have shorter life expectancies, insurers view them as higher risk, leading to higher life insurance rates. To illustrate this impact, consider a 10-year term policy with $250,000 in coverage: a 50-year-old woman would face an average monthly life insurance cost of $31, while a 50-year-old man would pay $37.

This gender-based pricing reflects the insurer's risk assessment, considering the average lifespan and health profiles of men and women. It underscores the importance of understanding how various factors, including gender, can influence the cost of life insurance.

The table below shows the average monthly life insurance policy cost for female and male policyholders.

Smoking significantly impacts term life insurance costs due to the health risks associated with tobacco use. Insurers classify smokers as higher-risk applicants because smoking increases the likelihood of developing various health issues, such as heart disease, lung cancer and other serious illnesses.

As a result, smokers face considerably higher life insurance premiums than nonsmokers. Depending on other factors, term insurance rates can be double or even triple that of nonsmokers. For example, the average cost of term life insurance for 40-year-old smokers is $41. Meanwhile, the average life insurance premium for a 40-year-old nonsmoker is only $18. This price adjustment reflects the increased risk and potential for earlier claims that insurers must account for when underwriting policies for smokers.

The term life insurance rate chart by age below shows the typical life insurance rates for smokers across different ages and coverage amounts.

Your health rating provides a snapshot of your overall well-being and potential risk to the insurer. Excellent health often translates to lower risk and lower life insurance premiums. Conversely, poor health indicates higher risk, leading to higher life insurance rates.

For example, a 40-year-old man seeking a $250,000 10-year term life policy would pay an average monthly premium of $20 if he is in poor health, compared to $18 for the same individual in excellent health. This comparison highlights the financial benefit of maintaining good health when it comes to life insurance costs.

Navigate the term life insurance rates chart below to see the average term life insurance rates by age for individuals with poor health.

The term of the policy plays a significant role in the life insurance rates. For instance, for a 60-year-old man seeking a 10-year term life insurance policy with $250,000 in coverage, the average monthly life insurance cost would be $76. If he opts for a 20-year term life insurance policy with the same coverage amount, the monthly premium increases to $150.

This increase shows how the length of coverage can substantially affect the cost. A longer-term policy means the insurance company is committing to a rate for an extended period, during which health risks may increase. The insurer charges more to offset this additional risk.

Use the term insurance rates chart below to compare 10-year term life insurance rates and 20-year term life insurance rates by age.

Coverage amounts directly correlate with life insurance costs. Typically, the more coverage you seek, the higher the life insurance price. This association is because the insurance company's potential payout increases with the coverage amount, as does the risk they assume.

For example, a 40-year-old man opting for a 10-year term policy with $250,000 life insurance coverage would pay a monthly average of $18. If he chooses $500,000 in life insurance coverage, the term life insurance cost increases to $29; for $1 million in life insurance coverage, it jumps to $53 per month. These figures illustrate how the coverage amount can impact the cost, helping you understand the financial implications of your selected coverage level.

Refer to the term life insurance rates chart below to compare the average monthly cost of term life insurance for different coverage amounts for various ages.

The state you live in can significantly impact your life insurance premiums. Different states have varying regulations, costs of living and mortality rates, all of which can influence your life insurance rates. For example, a state with higher medical costs might increase premiums as the insurer anticipates higher expenses.

Additionally, some states have specific regulations that impact how insurers can calculate premiums, leading to variations in cost across state lines. In California, for instance, regulations govern the use of HIV testing in the underwriting process for life insurance, requiring insurers to obtain written informed consent before administering the test. This focus on consent and the limitations placed on how insurers can use policyholder information can impact the underwriting process and, consequently, the premiums for life insurance policies.

Understanding how your location affects your life insurance premiums can provide insight into the pricing and help you make a more informed decision when selecting a policy.

The table below includes each state's average monthly cost of term life insurance, reflecting how regional factors can influence rates.

Whole life insurance is a type of permanent life insurance designed to provide lifetime coverage. Unlike term life insurance, which covers the insured for a specified term, whole life insurance remains in effect for the insured's entire life as long as premiums are paid. This policy also includes a cash value element that can grow over time and be used as a savings vehicle or borrowed against if needed.

The average cost of whole life insurance is typically higher than the price of term life insurance due to the lifelong coverage and the cash value accumulation. Factors influencing whole life insurance rates include the insured's age, health and the policy's benefit amount. Additionally, dividends from the insurer, which can be applied to reduce premiums or enhance cash value, may also affect the overall cost of a whole life policy.

Most insurers offer instant online life insurance quotes for term policies due to their simplicity. Whole life insurance, with its more customizable features like payment schedules and options for cash value growth, usually necessitates a more comprehensive evaluation. Accurate whole life insurance quotes may require direct communication with an insurance agent or the company itself. This interaction helps ensure that the premium calculations consider all personal factors and policy customization options.

When comparing term life insurance and whole life insurance, consider both cost and benefits, as each type serves different financial goals.

Determining the right amount of life insurance coverage depends on several key financial factors specific to each individual or family. Here are essential considerations to help you decide:

• Debt: Add up outstanding debts, like a mortgage, car loans and credit card balances. Covering these amounts with life insurance ensures that family members won’t inherit these financial obligations.
• Income Replacement: Many financial advisors suggest getting enough coverage to replace income for several years, especially if dependents rely on it. A general guideline suggests around 10 to 15 times your annual income.
• Education Costs: If you have children, include future education expenses, such as college tuition, to help secure their educational goals.
• Family Expenses: When deciding on coverage, consider monthly expenses like utilities, groceries, health care and transportation. Treat life insurance costs as a safeguard to maintain your family's lifestyle.

Using a life insurance needs calculator or consulting an agent can help align coverage with these financial needs. Factoring in these elements allows you to choose a coverage level that supports your family’s financial future.

To help you better understand the average cost of life insurance, here are some commonly asked questions that shed light on how insurers determine these costs and what you might expect to pay.