The best way to start learning about life insurance rates is by getting an actual quote. This calculator will estimate your life insurance needs and, in less than a minute, give you a complimentary quote for a 20-year term life insurance policy – one of the most popular types of coverage available.
Average monthly costs for term life insurance by age and gender
SOURCE: https://www.policygenius.com/life-insurance/affordable-life-insurance/ Rates valid as of 1/11/2021
This chart shows average rates quoted in January 2021 for a 20-year "level term" life insurance policy, which means premiums stay the same for the length of the policy. Will the cost of life insurance be the same for you? Probably not, because you're not an "average," you're an individual with specific needs. When you buy a policy, the life insurance company will set the rate you pay according to the type of policy you choose, the coverage amount, and the risk to insuring your life, which has to do with your expected longevity.
Fact: Life insurance can be surprisingly affordable.
The Life Insurance Marketing and Research Association (LIMRA) found that most people believe the price of a term life insurance policy is three times higher than the actual cost 2.
How the type of policy affects life insurance cost
All life insurance policies pay a death benefit to your loved ones if you pass away. But they don't all work – or cost – the same. Here's what you need to know about the main types of policies:
Average annual costs for whole life insurance vs. term life
20-year term life
|Male, age 30||$4,015||$228|
|Female, age 30||$3,558||$193|
|Male, age 40||$6,042||$341|
|Female, age 40||$5,413||$289|
|Male, age 50||$9,432||$842|
|Female, age 50||$8,440||$654|
Annual premiums using an average of three lowest prices available in each category for healthy men and women, per https://www.nerdwallet.com/article/insurance/term-vs-whole-life-insurance; Source: Quotacy
As the chart shows, term life insurance costs significantly less than permanent whole life insurance. Term is often called "pure" life insurance coverage designed only to provide a death benefit if you die while your policy is in effect. The protection is temporary, typically for a set period of 10, 15, 20, or 30 years. Choosing a longer-term length increases your monthly premiums for a given level of coverage because there's a higher likelihood the insurance company will have to make a payout. But no matter how long your term lasts, when it ends, there's no cash value to the policy despite years of paying premiums. Also, you're no longer protected – you either have to apply for a new policy and pay higher life insurance rates (because you're older) or go without coverage. However, many term life insurance policies (such as those from Guardian)may let you convert to permanent coverage while the policy is still in effect.
This type of permanent insurance typically costs more than term because it provides life-long protection and other financial benefits.3 There is a guaranteed death benefit payable from the first day the policy is in effect, like a term life policy. Unlike with term life coverage, that protection never ends, as long as premiums are paid. You also get a financial asset that can last your entire life because whole life policies build cash value.4 A portion of your premium dollars are set aside in cash value, and that sum grows at a guaranteed rate – with tax advantages.5 A mutual life insurance company (such as Guardian) may also pay dividends, which can further compound growth.6 Over time, the cash value can grow into a valuable sum that can provide tax-advantaged personal loans, provide cash to live on when you reach retirement age or even be used to help pay monthly premiums.7,8,9
Like whole life insurance, this is a permanent policy that can build cash value.10 However, universal life insurance also gives you the added flexibility of adjusting your monthly life insurance within a specific range so that premiums can cost less than whole life insurance.11 If you're attracted to many of the advantages of a whole life policy but would like to be able to control the cost of life insurance as work circumstances change, universal life insurance could be a cost-effective solution for your needs.
How coverage amount affects cost
A higher coverage amount (also called face value) always costs more than the same type of policy with a lower coverage amount.
Term life insurance rates can be more affordable than whole life insurance rates in the sense that you can get a given amount of coverage for less. However, whether you're shopping for permanent insurance or term, more coverage always means higher premiums. So whatever kind of policy you're looking to get, one way to control life insurance rates is by opting for less coverage. On the other hand, if you're purchasing life insurance and trying to decide between a higher or lower benefit amount, you should know that a higher death benefit can be more cost-effective than a lower one. If you look at the sample rates in the chart above, you'll see that you can double your coverage – from $500,000 to $1,000,000 – without doubling your premium. To put it another way, the more you get, the less you pay per $1,000 in coverage: The $100,000 policy costs 20¢ per $1,000, but the $1,000,000 is just 11.2¢ per $1,000 of insurance protection.
How much life insurance do you actually need? There are several ways to estimate the need for life insurance coverage based on your financial situation. Our life insurance calculator uses the "Human Life Value" method, which looks at what you're earning now plus what you expect to earn in the future. Between the ages of 18 and 40, it multiplies current income by about 30; as you get older and have fewer working years left, that multiple decreases.7 Other rules of thumb to estimate coverage amounts include:
Consider multiplying your income by 10
Take your annual salary and add a "0" at the end. So, $50,000 salary equals $500,000 of coverage, $75,000 equals $750,000, and so on.
Consider multiplying your income by 10 – and add college for each child
How much should you add? Account for somewhere between $100,000 and $150,000 per child. If you split the difference – and have two kids – that's an extra $250,000.
Consider using the DIME formula
DIME stands for Debt, Income, Mortgage, and Education. This method estimates your life insurance need as the sum of your financial obligations and other expenses:
- Debt: Total all your outstanding debts other than your mortgage.
- Income: Take your salary and multiply by the number of years you think your family needs protection – or at least as long as you have children at home.
- Mortgage: Look at your last statement and get the payoff amount.
- Education: The anticipated cost for sending each of your children to college.
How your risk level affects cost
Health and life expectancy determine the likelihood of a payout – and your level of risk to life insurers. That affects rates, so a healthier person typically has lower premium payments than a less healthy person.
Average monthly term life insurance rates
There's less risk to insuring a healthier person because they are less likely to die in a given time frame – be it months, years, or decades – compared to a less healthy person. That's more than just common sense: It's a fact proven by actuarial science, the discipline that applies mathematical and statistical methods to assess risk in insurance and other industries. When you apply for a policy with, there's an underwriting process. Life insurance companies gather your personal information, ask about family medical history, and typically require a medical exam to determine how healthy you are. You may feel like you're in perfect health, but an issue like high blood pressure or cholesterol can affect life expectancy, so the life insurance company you choose will want to consider that. Other factors also help to determine how risky you are to insure, and the life insurance rates you'll end up paying:
Why does life insurance get more expensive with age? Because as you get older, life expectancy goes down – and the likelihood of an insurance payout goes up. So understandably, this is a crucial factor used to determine rates.
You may have noticed that many rate charts break out separate costs for women and men (including two charts in this article). Maybe you also saw that women consistently pay less than men. This has nothing to do with chivalry; women enjoy lower average rates because they have a statistically proven tendency to live longer than men.
Poor driving habits can indicate excessive risk-taking behavior – especially if there are DUI convictions on a person's record. Some insurance companies will raise their rates to account for that added risk.
Certain professions (such as law enforcement) and work environments (e.g., an off-shore oil rig) are riskier than average. This can add to a person's rates.
High-risk activities and habits can make your life insurance rate go up. For example, there's a mortality risk to scuba diving, so that often affects rates. Tobacco use has been proven to lower life expectancy, so smokers pay higher rates than non-smokers. But unlike many other risk factors, smoking is a behavior that can be controlled. The upside? If you quit smoking, you have the potential to lower your rates – and, more importantly, increase your life expectancy.
Through your workplace
A place to start is your workplace. Your employer may offer life insurance at group rates, which tend to be lower than average life insurance rates for individuals. If it's offered as a benefit, think about enrolling. It's generally affordable and easy to buy. Your employer has done the work of getting life insurance quotes and choosing a policy, so enrolling typically requires little more than signing a form. You may be able to obtain this coverage without taking a medical exam or providing medical records. However, the benefit amount offered may be limited, and you might want more protection to provide greater financial confidence for your loved ones. Fortunately, other options are available.
If you don't have workplace coverage – or want to supplement it – it can be easy to get term life insurance quotes online. Many providers, including Guardian, will give you an estimate of how much you need, make it easy to compare rates, and start your application – all within minutes. On the other hand, if you're looking for a whole or universal policy that builds cash value, it may be harder to get a permanent life insurance quote online. These types of financial products are more complex and should be tailored to your individual financial needs, so it may be worth your while to talk things over with a financial professional.
Working with a financial professional
If you're interested in permanent coverage with a wealth-building component – or you're not sure what kind of protection is best for you – consider working with a professional who can help guide these important financial decisions. He or she can provide information about the options that fit your current budget and long-term financial goals. If you have a financial professional you trust, ask them how much coverage and what type of life insurance policies to consider. Otherwise, Guardian can connect with a financial representative who will listen to your needs, tell you about the best ways to meet those needs at a cost you can afford, then help you decide.
How much is life insurance a month?
The average annual life insurance premium per U.S. household is $993.7 According to a recent survey of insurers and rates, the median cost for a 20-year term policy was 11.1¢ per $1,000 of coverage12. However, that number is an average life insurance cost for all applicants between the ages of 30 and 50. The actual rate you'll pay will vary based on a range of conditions and items, including the policy type, benefit amount, length of term, gender, health, and more.
How much is a $500,000 life insurance policy?
In 2021, the average monthly cost of a $500,000 20-year term life insurance policy for a non-smoking male in good health is $28 at age 30; at age 40, it's $39; at age 50, $93. Women tend to live longer and enjoy lower premiums, so their life insurance rate is $22 at 30; $33 at age 40; and $71 at 50.13
Is it worth paying for life insurance?
If other people depend on you for support, life insurance is one of the most powerful tools available to help protect their financial well-being if you pass away. Consider: a 30-year-old woman with little or no savings could get $1,000,000 of term life insurance for $36 a month.8 If that woman passed away after her first year of coverage, she would have paid just $432 for the policy, but her family would receive an income tax-free insurance payout of $1,000,000. Permanent life insurance, such as a whole life policy, doesn't have a limited term length and includes a cash value component. A portion of your premium dollars are invested, and this sum grows over time on a tax-deferred basis, so you don't pay taxes on the gains. A policy's cash value provides additional benefits that you can use while you're still alive: you can borrow money against your policy's cash value, use it to pay your premiums, or even surrender it for cash to help supplement your retirement income.
At what age should I get life insurance?
The younger you are, the less you'll pay for coverage, so it may not be worth putting off. If you are anticipating a significant life event, such as marriage or the birth of a child, consider shopping for a life insurance quote. The fact is every adult with childcare or other financial obligations - including final expenses - should consider getting life insurance protection to help pay for those obligations in the event of his or her death.
How do I know if the insurance company reputable?
All large insurance companies may seem alike, but they aren't. Some are more financially sound. Others are easier to work with. If you want to find and work with some of the best life insurance companies, there are objective metrics that can help:
- High Financial Strength Ratings14 Independent organizations rate the financial strength of insurance companies to ensure their ability to provide coverage and meet obligations.
- High customer satisfaction scores Customer surveys and reviews can tell you how satisfied others are with an insurance company's services.
- Low customer complaints The National Association of Insurance Commissioners (NAIC) collects data about complaints with state regulators.
Will my premiums change over time?
Two kinds of policies feature premiums that don't change over time. One is "level" term life insurance (the most common form of term life), where the premium stays the same from the day coverage starts until the end of the term. The other type is a whole life policy, where the premium remains the same for life. Whole life insurance quotes are substantially higher than those for term life insurance. However, it's important to note that whole life policies have a cash value that grows tax-deferred over time and can eventually be used to pay part or all of the monthly premium – so the policyholder may no longer have to pay the entire amount out of pocket.