How to determine average life insurance cost per month.
6 core factors determine the average cost of life insurance — your age, gender, state, tobacco use, coverage amount, and product type. Most life insurance companies offer 6 rate classes as well.
- Preferred Plus
- Preferred
- Standard Plus (some carriers don’t off this class)
- Standard
- Preferred Smoker
- Standard Smoker Rates
Insurance companies use many factors to estimate your rates which we explain more about below.
So when you ask, how much is life insurance? The truth is the average cost for you will be different than the average cost for another person based on the factors listed above. Insurance companies use many health and non-health-related factors to determine your life insurance premiums.
When it comes to the price of life insurance, there is no one-size-fits-all policy type or amount of coverage. Because of that, the life insurance rates of a given policy can vary – sometimes significantly – from one person to another.
To help better understand how to determine your life insurance rate, you need to know how life insurance companies determine their prices.
So let’s take a look.
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How Life Insurance Rates are Determined
There are many factors that go into the pricing of a life insurance policy. Some are known at the time of quote and some factors are unknown and will not be known until the medical records, exam, and reports are completed.
The Known Information
If you know these 6 parameters you can generate life insurance quotes from any carrier.
The known factors/parameters will include your:
- Age
- State
- Gender
- Tobacco Use
- Life Insurance Company
- Policy Type (the type of policy such as term or permanent).
- Death Benefit (the coverage amount being purchased)
With these 6 parameters, you can get an average life insurance cost. However, you still have to calculate the unknown factors below.
Unknown Information
The unknown factors are things that we do not know when running a quote which can affect your average life insurance rates. The underwriter will want to know this data below before approving a rate class for your insurance policy.
- Medical History – your past medical history and any doctor/hospital visits can drastically affect the average cost.
- Medical Exam Results – the final cost of life insurance will not be determined until the result of your exam results have been reviewed and the carrier knows your health status.
- MVR – Your driving record over the last 5 years. Just like auto insurance.
- Prescription History – The history of any medications you have taken.
- MIB Report – What hits are on the medical information bureau report.
- Rate Class – Preferred plus, preferred, standard plus or standard rate assigned after an offer is made by the carrier.
- Credit Score – believe it or not, your credit can impact your life insurance policy.
- Height and Weight – Your height and weight will determine if you can qualify for a certain rate class. See carrier height and weight charts here.
The final cost of life insurance is never known until the underwriter evaluates these things above. Certainly, health will also play a key role in the premiums that are charged for a policy.
For example, those who are considered to be in “average” good health will usually pay a standard rate. If you have certain health conditions, you will likely pay more when buying life insurance. Alternatively, if you are in excellent health, then you could qualify for a lower or preferred premium.
Other factors that are considered.
- Occupation – Those who work in a more “risky” occupation, such as firefighting, will usually pay more than an insured who works in a safer line of work.
- Risky Activities – If you engage in risky hobbies or activities such as skydiving, scuba diving, or rock climbing, you are apt to pay more for life insurance, as these may put you at a higher risk of a claim.
- Insurance Company – Just like with many other products and services, the price that is charged for life insurance can vary from one life insurance company to another – even for the same type and death benefit. With that in mind, it can be beneficial to shop around and get premium quotes from several insurers before you make a long-term commitment to one plan.
Given the number of determinants, it can at times be difficult to come up with an average life insurance cost. In fact, it’s easy to see how life insurance prices may vary over a period of time – sometimes significantly – from one person to another, based on their situation and needs.
However, knowing the price of life insurance for your particular needs can be beneficial. That’s because you will be more easily able to budget for it.
One way that you can narrow down your potential cost of life insurance is to use our quote engine, where you can quickly shop prices from over 30 of the top life insurance companies.
How much is term life insurance for a male
| Age | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|
| Male – 37 | $16 | $25 | $45 |
| Male – 42 | $22 | $38 | $69 |
| Male – 47 | $34 | $62 | $117 |
| Male – 52 | $48 | $88 | $165 |
| Male – 57 | $79 | $145 | $278 |
*Effective 01/11/2019.
See the life insurance monthly cost charts below which shows the biggest factor in the average term life insurance premium depends on your rate class. This is how prices would look for a 40-year-old male at each rates class for a 20-year term policy with a $250,000 death benefit.
How much is term life insurance for a female
Term life insurance rates for a female are going to cost much less than for a male. This is due to life expectancy. Females live longer than males on average so therefore the prices are lower. Compare the male charts above and you can see the cost difference for yourself.
| Age | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|
| Female – 37 | $13 | $21 | $34 |
| Female – 42 | $18 | $30 | $52 |
| Female – 47 | $25 | $44 | $80 |
| Female – 52 | $37 | $66 | $122 |
| Female – 57 | $58 | $103 | $200 |
*Effective 01/11/2021.
Here again, you can see how much a term life insurance policy costs for a female at each rate class. If you’re in excellent health the insurer will offer a lower premium for for a female at each rate class. If you’re in excellent health the insurer will offer a lower premium for your life insurance coverage.
How much is a whole life insurance policy?
Whole life insurance costs a lot more than term insurance. Whole life insurance is permanent life insurance coverage and is designed to last your entire life, unlike term insurance. As well, this type of policy will build up cash value in the policy, term insurance does not build cash value.
Whole Life, Preferred Rates, Non-Tobacco, Rates Shown Per Month.
| Age | $50,000 | $100,000 | $250,000 |
|---|---|---|---|
| Male – 37 | $63 | $105 | $254 |
| Male – 42 | $74 | $130 | $317 |
| Male – 47 | $92 | $162 | $397 |
| Male – 52 | $116 | $205 | $505 |
| Male – 57 | $147 | $260 | $642 |
*Effective 01/11/2021.
Average cost of term life insurance rates
Term life insurance rates will vary based on age, rate class, tobacco use, gender, state, and term length. A ten-year term being the cheapest policy and a 30 year term life policy being the most expensive plan. You don’t need life insurance rate charts just use the tools below.
Ready to find your price?
Hopefully, by this point, you have a good idea about how much life insurance costs.
One of the primary criteria when making any type of major purchase is the cost – and the same holds true for a life insurance policy. Even though proceeds can essentially be “bought” for pennies on the dollar, it is still important to know how the policy premiums will fit into your overall budget.
Just like you would when comparing the prices of other goods and services, knowing the average price can be extremely beneficial. As consumers of products and services, it is oftentimes helpful to study the average prices of items before we purchase them. That way, we can better gauge whether or not we are getting a “good deal.”
Insurance Geek can make the process of choosing the right policy and premium payment easy. We work with more than 30 top carriers in the industry to find you the best life insurance quotes. Because of that, we can shop and compare policy features and prices, so that you can make the best decision possible.
We can easily help you find your average cost of life insurance. Talk to an Insurance Geek today!
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