Updated: December 18, 2024
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The average cost of life insurance for a $500,000 term policy is $29 per month. This coverage offers more than just funeral expense relief — it can also cover mortgage payments, educational costs and daily living expenses for years.
Although many insurers offer this policy, costs and benefits can vary. MoneyGeek broke down the different kinds of life insurance available in the market and the factors that affect their cost.
A $500,000 life insurance policy costs an average of $29 monthly for a 10-year term and $44 for a 20-year term.
Various factors affect the cost of $500,000 life insurance policies, including age, gender, term length, coverage details and insurance provider.
Your coverage amount should be enough to pay your unpaid debts, burial costs and dependent's expenses — about 10 to 12 times your annual salary.
Why Trust MoneyGeek? We analyzed 1,488 life insurance quotes to determine the average cost of a $500,000 life insurance policy for a variety of buyer profiles.
Rates and company information for life insurance providers are recent as of 2023.
Life insurance companies determine the cost of life insurance based on the insured's age, gender, health profile, lifestyle and other factors. Policy details, including term length and coverage amount, also affect life insurance costs.
For instance, the average monthly cost of a $500,000 life insurance policy with a 10-year term for a 40-year-old in excellent health is $29. The average monthly cost of life insurance for a 20-year term for the same individual is approximately $44.
Understanding factors insurance companies consider when evaluating life insurance rates can help you find the most suitable policy for your financial circumstances and coverage needs.
Life insurance policy prices vary significantly from person to person due to certain determining factors, each of which shapes the life insurance price you're offered. Here’s a breakdown of the main elements that influence your life insurance rates:
While certain details significantly impact the monthly cost of life insurance, it's equally important to recognize what shouldn't influence your rates:
Understanding the factors that do not typically affect life insurance rates can help guide your expectations and decisions when comparing life insurance policy amounts and payment options.
Age is the most critical factor affecting life insurance's cost since insurance companies consider it the most significant risk determinant. People typically buy life insurance in their 40s, but purchasing a policy at a younger age to lock in a lower premium is generally better.
On average, a 10-year, $500K term life insurance policy costs $20 per month for a 30-year-old. Similar life insurance coverage for a 50-year-old would cost $65 per month.
In addition, a longer-term length also makes life insurance more expensive. A 30-year-old person buying a 10-year term life insurance policy would pay $20 per month on average, but the average cost of a 20-year term life insurance is $28 per month.
Use the table to compare the cost of life insurance by age and see how monthly premiums differ across age groups from 30 to 70.
| 30 | $20 |
| 40 | $29 |
| 50 | $65 |
| 60 | $141 |
| 70 | $410 |
For seniors, average life insurance rates can significantly rise as the applicant ages. This increment is primarily due to the higher risk associated with insuring older individuals, who are statistically closer to the life expectancy age and more likely to have health issues.
For example, the average life insurance premium for a 10-year term policy for a 60-year-old may be around $141 per month. In contrast, a 70-year-old purchasing the same $500K life insurance policy could see rates as high as $410 per month. This stark increase highlights how life insurance premiums vary by age and underscores the importance of securing a policy earlier in life, if possible.
Understanding these cost dynamics is vital for seniors evaluating their life insurance options, particularly those considering life insurance monthly payment plans.
The term length of your life insurance is the number of years the insurance company will cover you. If you die within that period, the insurer will pay a death benefit to your beneficiary. Companies typically offer term lengths ranging from 10 to 30 years.
Your policy's term length will affect your life insurance rates. Shorter terms, like a 10-year life insurance plan, will have lower rates. Choosing a longer term, like a 20-year term, will result in higher premiums. The insurer agrees to a longer coverage duration. The likelihood of a claim also increases.
In the life insurance chart below, we've broken down the average monthly cost of a $500,000 life insurance policy for various term lengths.
| 10-Year Term | $29 |
| 20-Year Term | $44 |
People buy permanent life insurance to provide lifetime financial protection for their loved ones and supplement their retirement assets. Whole life, universal life and guaranteed issue are the most common types of permanent life insurance:
Permanent life insurance policies don’t expire, but they can cost up to 20 times more than term life insurance policies on average. This is because such policies are guaranteed to pay your beneficiaries, provided premiums are up to date.
Insurance companies consider health an essential underwriting factor when pricing their policies. Generally, a person with poor health is riskier to insure because they have a higher chance of dying early.
Because smoking may lead to health problems and early death, it's much riskier for insurers to provide life insurance for smokers. A person's lifestyle and health profile also affect their life insurance rates.
On average, a 20-year term life insurance policy costs $44 monthly for a healthy, nonsmoking adult. The average cost of the same policy for a smoker is $102, while a person with poor health may have to pay $53 monthly.
Below is a table highlighting the average monthly costs of a $500,000 term life insurance plan for smokers.
| 10-Year Term | $68 |
| 20-Year Term | $102 |
The table below shows the average monthly cost of life insurance with a $500,000 coverage amount for people with a health condition.
| 10-Year Term | $36 |
| 20-Year Term | $53 |
Your life insurance policy's coverage amount is the amount paid out to your beneficiary or beneficiaries if you die. You have several options when it comes to how your death benefit is disbursed. These include lump-sum payments, installments and retained asset accounts.
Insurers offer various coverage amount options, and a $500,000 life insurance policy is just one of them. Your financial and family situation will determine the amount of coverage you need. If you're the breadwinner in your family or carry a lot of debt, buying life insurance will help ensure your dependents won't face financial hardship if you pass away.
Obtaining $500K life insurance with no medical exam offers a convenient option for those seeking quick coverage without the hassle of a health assessment. However, the rates for such policies can vary significantly between companies. For a 10-year policy length, the average cost for male policyholders typically ranges from $51 to $78 per month, while for female policyholders, it spans from $41 to $55 per month.
The average monthly life insurance cost increases when factoring in a longer term, such as a 20-year policy. For males, the cost ranges from $76 to $105, and for females, it ranges from $59 to $81.
The table below shows the average life insurance prices from companies offering no medical exam policies.
| AAA | $51 | 10 |
| Mutual of Omaha | $52 | 10 |
| Fidelity | $65 | 10 |
| Haven | $78 | 10 |
Sometimes, insurance companies allow young and healthy applicants to forgo medical exams when applying for life insurance. They’ll only ask a few health and lifestyle-related questions. They may provide approval within minutes, depending on your profile.
Life insurance can be an important financial safety net, but it does not have to break the bank. Certain strategies can significantly reduce your monthly life insurance cost and help you secure affordable protection.
Life insurance costs vary by age. Purchasing a policy when you're younger can lock in lower rates, as insurers see less risk in insuring younger, healthier individuals. Starting young can lead to substantial savings over the life of the policy.
If cost is a major concern, choosing a term life policy can be much more affordable than a permanent one. The average term life insurance cost is significantly lower than permanent life insurance policy costs because it does not accumulate cash value and only provides coverage for a specified period.
Regular exercise, a healthy diet and avoiding risky behaviors like smoking can improve your health classifications with insurers, thus reducing the average price of life insurance you pay each month.
Do not settle for the first quote you receive. Comparing prices for life insurance from various providers can help you find the best rate for the coverage you need. Use online tools and consult with independent agents to get a broad range of life insurance quotes.
Evaluate your actual life insurance needs periodically. You might be paying for more coverage than necessary. Reducing the death benefit or adjusting the terms of your policy can lower your monthly premium while still providing adequate protection.
Understanding key life insurance terms can help you navigate your options and ensure you select the right coverage for your needs. Here are some important terms to know:
Transamerica offers the cheapest 10-year, $500K term policies. Its average monthly premiums are $15 for female adults and $17 for male adults. Allstate provides the second most affordable policies, averaging $17 for females and $18 for males.
You can obtain a $500,000 life insurance policy from various insurance providers online and through traditional channels. You can also consult financial advisors or use online comparison tools to find the best life insurance rate and coverage options.
The table below compares average monthly premiums from different companies. These rates are for a 10-year term life insurance policy with $500,000 in coverage.
| Transamerica | $17 |
| Allstate | $18 |
| GEICO | $19 |
| Protective | $20 |
| Nationwide | $22 |
| AAA | $25 |
| Mutual of Omaha | $26 |
| State Farm | $31 |
| Fidelity | $32 |
| Prudential | $32 |
| Haven | $38 |
| Bestow | $48 |
| Progressive | $52 |
An online life insurance policy can be a good option for people looking for no-hassle life insurance quotes. These policies allow you to compare and purchase coverage quickly, streamlining the buying process. However, not all types of policies are available online.
As a general rule, your life insurance coverage amount should be about 10 to 12 times your annual salary. This amount of coverage gives your dependents financial protection in case of your untimely death. Of course, your ideal amount will vary based on your financial and family situation.
If you’re buying a $500,000 life insurance policy, consider any unpaid debt, burial costs and your family’s everyday expenses. It also makes sense to consider future costs, such as your children’s college tuition.
Although $500,000 is the most popular coverage amount, you can always buy more or less coverage depending on your needs and circumstances. Use MoneyGeek's free calculator below to estimate how much life insurance coverage is adequate for your situation.
We answered some frequently asked questions about $500,000 life insurance plans and life insurance pricing to help you decide if these policies are right for you.
Life insurance works by paying your beneficiary or beneficiaries a death benefit if you die, provided that your insurance premium payments are up-to-date. If your coverage amount is $500,000, your policy will pay your beneficiary in a lump sum, installment or retained assets.
Whether or not a coverage amount is enough for you depends on your finances and family situation. Consider your unpaid debts, likely funeral costs and your family’s current and future expenses. As a rule of thumb, your coverage amount should be 10 to 12 times your annual salary, but the ideal amount may differ based on your circumstances.
Yes, you can get $500,000 in life insurance coverage without undergoing a medical exam by purchasing guaranteed issue, simplified issue or instant life insurance. However, such policies can be more expensive or have limited availability than traditional life insurance.
For a healthy 30-year-old nonsmoker, a $500,000 term life insurance policy typically costs around $20 per month, while a whole life policy with the same coverage would be considerably more due to the nature of the policy.
A $500,000 term life insurance policy for a 60-year-old man typically costs between $141 and $286 per month, depending on factors like health and the length of the term. In contrast, whole life insurance at this age is usually much more expensive due to the guaranteed payout at the insured's passing.
The amount of life insurance you need depends on your financial obligations, debts and family's future needs. A common rule is to have coverage 10 times your annual income. Assessing your specific situation is essential to determine the right amount.
Life insurance for a 65-year-old man can be costly as premiums increase with age. The average life insurance cost per month for one person in this age group may vary significantly based on health and policy details.
Generally, men pay more for life insurance than women due to shorter life expectancy and higher risk factors. For example, the average cost for a 10-year term life insurance with $500,000 coverage is $29 per month for a 40-year-old man. The same policy typically costs $24 per month for a woman.
Term life insurance is typically the cheapest type of policy, offering basic coverage without a savings component. Actual prices vary due to differences in needs and circumstances. Based on MoneyGeek's analysis, Transamerica provides the cheapest average cost for a 10-year term life insurance at about $17 per month.
It depends on various factors. Life insurance can be expensive, especially as you age or if you opt for permanent life insurance. Term life policies offer more affordable rates and can be a cost-effective choice for many people, especially when planned early.
About Mark Fitzpatrick
Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.
Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.
