Whole Life Insurance Rates in 2025
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Whole life insurance offers several advantages compared to term life insurance. While term life only lasts for a specific period of time, whole life is designed to provide permanent life-long insurance protection that doesn't expire as long as premiums are paid. Once set, the premium payment never increases due to age or deteriorating health.1 Perhaps best of all, whole life can build income tax-deferred cash value at a guaranteed rate over the policy's life and may even accrue dividends from the insurance company.2,3 So you can borrow against the policy, withdraw policy value to help fund retirement, or even use it to pay your premiums.4 You typically can't do any of those things with term life policies. However, there is a drawback: Whole life insurance rates are generally much higher than term life insurance rates.
How much do people typically pay for whole life?
Many factors affect a policy's cost, and it's impossible to know your exact monthly payments before applying for coverage and going through the underwriting process. However, NerdWallet listed 2025 average annual premiums for preferred applicants in good health seeking a $500,000 whole-life policy.
The average annual cost for whole life insurance
Male Non-Smoker | Female Non-Smoker | Male smoker | Female smoker | |
|---|---|---|---|---|
Age 20 | $3,014 | $2,695 | $3,623 | $3,275 |
Age 30 | $4,311 | $3,959 | $5,283 | $4,839 |
Age 40 | $6,387 | $5,860 | $7,985 | $7,222 |
Age 50 | $10,069 | $9,037 | $12,680 | $11,211 |
Age 60 | $16,698 | $14,635 | $21,040 | $18,400 |
Age 70 | $29,302 | $25,631 | $36,728 | $32,380 |
Average annual premium. Data source: Covr Financial Technologies. Lowest three rates for each age averaged. Data valid as of February 27, 2025.5
As you can see, rates are higher for men than women, and the difference increases for both as the cost goes up with age. Health issues – and in particular, smoking – affect rates as well. By age 50, the difference is more than $2,000 annually – on average. But as we’ve noted, a number of other things affect the price you’ll actually pay for coverage. Here’s what you should know.
What factors impact my whole life insurance rates?
The coverage amount affects life insurance rates in an obvious way: the bigger the death benefit, the higher the premium. But many other factors come into play as well, including:
1. Age
No matter your current age, your monthly premium will likely never be lower than it is today. Good health and life expectancy lower the cost of insurance, so younger people pay less on average. Getting a policy when you are young also makes qualifying for coverage easier and gives you more time to build cash value.
2. Gender
When it comes to life insurance, men and women are not equal. According to the Centers for Disease Control, in 2023, the average life expectancy for men in the U.S. was 75.8 years, while women averaged 81.1 years. A longer life equals more monthly premiums paid, which leads to lower rates per month.6
3. Tobacco use
Whether you smoke, vape, or dip, using tobacco increases your medical risks and life insurance costs. Tobacco users often pay two to three times as much for life insurance as non-users. Even if you've quit using tobacco, you will usually need to be tobacco-free for at least a year to qualify for non-smoking rates. When you apply for coverage, life insurance companies typically require a physical, including a nicotine usage test, so it's essential to give full disclosure about your tobacco usage when applying.
4. Risky occupations and hobbies
Certain work environments, such as oil rigs, have hazards known to increase death or injury risk, affecting rates. Similarly, certain hobbies, such as scuba diving, can also lead to higher rates.
5. Health status
You’ll likely be required to answer health questions, and take a medical exam as part of the application process so that the insurance company can better assess and predict your life expectancy.
Underwriting
This is the name of the evaluation process used by life insurance companies to assess mortality risk when you apply for a policy, based on the factors noted above. After evaluating the results (and assuming you are approved) the insurance company will assign you to a rate classification, such as:
Preferred Plus: This is the best classification with the lowest premiums for an individual for a given level of coverage. These individuals are in excellent condition, fall under healthy BMI ratings, have no major family medical history or issues, and live a clean and healthy lifestyle.
Preferred: These individuals typically have minor medical issues, such as high blood pressure or cholesterol. People who fall into this class won't quite get the best rates, but they will still be relatively low.
Non-Smoker Standard: Individuals in this category are in relatively good health but may have a few medical issues, such as being overweight. However, there are no major health issues.
Standard/Standard with Tobacco: These are higher risk individuals, which could be due to tobacco usage, family health history, or another issue. These individuals are approved for coverage but their rates will be higher.
It is also possible for those with serious medical issues to fall into a "substandard" category, which may not be insurable. These classifications vary somewhat by insurer, and it's important to remember that no life insurance company expects every prospective customer to be in peak medical condition.
Life insurance riders can also affect cost
Whole life insurance policies often come with add-ons, or "riders," either automatically included or available as an option for an additional cost.7 Added riders can affect premiums, but the incremental cost can be well worth the added protection provided. Here are some of the more common riders a company may offer with its whole life policies:
Accelerated Terminal Illness or Living Benefit rider allows you to access a portion of the death benefit if you have a terminal or chronic illness. This can help with medical bills and hospice care and is deducted from the insurance policy's total amount.
Accidental death rider pays an added death benefit if you die as a result of an accident.
Critical illness rider provides a lump sum that can be used to cover medical treatment if you are diagnosed with a life-threatening condition or illness. The amount used will be deducted from the total death benefit.
Guaranteed insurability allows you to increase your coverage at points in the future without requiring additional medical examinations.
Waiver of premium rider allows you to stop paying your premiums for a specified amount of time if you become disabled.8
Is whole life insurance a fit for me?
Now that you better understand what goes into the cost, it's important to consider the value as well. The primary value of a whole life insurance contract comes into effect on day one when the entire death benefit becomes payable to your heirs as an income tax-free lump sum.9 However, you'll pay more into the policy every month than the "cost of insurance," and that extra sum can help you build cash value. This cash value is tax-deferred and grows at a stable, guaranteed rate, insulated from market fluctuations. While the flat premium payment never changes, the percentage allotted to cash decreases as you age. At first, a larger percentage of your premium is applied to your cash value. As you age, the insurance company's risk increases, so more of your premium payment is applied to insurance costs. However, your cash value will still grow every year.
How cash value builds
With time, your cash value will grow at a guaranteed rate, and the money is tax-deferred, so you don't pay income taxes as it grows. This helps money grow faster. With guaranteed, compounded, tax-deferred growth, your cash value can grow to a significant sum over time.
The actual amount of cash value will be determined by several factors, including how long you've had the policy, the cost and amount of your policy, terms of the contract, guaranteed interest rates, and the insurance company itself, which may or may not pay dividends to policyholders. While every whole life policy has a cash value component, they don't all pay dividends.10 That's why you should consider purchasing your permanent life insurance policy from a mutual insurance company (such as Guardian). Mutual insurance companies are owned by their policyholders, so their policies can earn annual dividends – a part of the insurer's profits. Dividends can increase policy value beyond the guaranteed growth rate. While annual dividends are not guaranteed, Guardian has paid them every year since 1868.
Some things to consider if you're thinking about getting a whole life policy:
How old and healthy are you?
If you are young, a non-smoker, and in excellent health, then getting whole life while you are in the prime of your life can be a valuable move, even if it's a smaller policy. Not only can it provide your loved ones with protection should something happen to you, but you can also start building tax-deferred cash value that you can use later in life.11 Your insurance premium will likely never be lower than it is right now, and you'll have more time to build your cash value — and possibly accrue dividends — over a longer length of time.
Can you afford enough insurance to meet your family's needs?
If you’re older, the cost of whole life premiums may make it difficult to afford all the coverage you need to protect your family. In this case, you might consider looking at term life, at least as a way to supplement a smaller whole life policy.
How long until you retire?
If you are getting older and looking only to maximize retirement savings, whole life may not be your best option. While the policy can build cash value, other options may help you build more savings faster. You can also consider a smaller policy for burial expenses.
Have you maxed out your other contributions?
If you're in a high-income bracket and have already maxed out your 401(k) plan or IRA options, whole life insurance can be part of a tax-efficient wealth-building strategy, especially if you also want to provide a death benefit for your family.
Talk to a life insurance professional about life insurance
Life insurance can be a powerful financial tool to help protect your family and lifestyle. Since every situation is unique, experienced guidance can help tailor a whole life policy to your needs and provide a meaningful quote. Now would be a good time to discuss your situation with a financial professional who has helped others get whole life insurance coverage. If you don't know such a professional, ask friends or colleagues for a recommendation. Or, Guardian can connect you to a financial professional who can help.