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The actual numbers might surprise you.
If you’ve considered life insurance, you might think it’s too expensive for your budget — or that you don’t need it at all. But if you support a family, a life insurance policy can provide peace of mind that your loved ones won’t worry about the debts you leave behind or how they’ll get back on their feet after your gone.
The amount you’ll pay for a life insurance policy is based on your age, your overall health and your general lifestyle, which makes it hard to nail down an average monthly cost. But it’s possible to narrow down a general idea of how much a typical life insurance policy might cost for a specific demographic.
Click the tabs below to see the average cost of life insurance for a healthy nonsmoker.
Rates are provided by Quotacy and valid as of May 2018 in all states except New York and Montana.
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Average cost of life insurance for ages 18 to 70
A health person whose age falls between 18 and 70 can expect to pay an average $67.88 a month for a $250,000 life insurance policy. Of course, this cost varies wildly depending on which end of those ages you are, your lifestyle and your overall health.
For a $500,000 policy, the average premium jumps to $122.96 a month, while the premium for a $1 million policy averages $231.03 a month.
What affects the cost of life insurance?
To calculate how much you might pay for life insurance, your insurer’s underwriters consider how much you’re looking for, your overall health and even your hobbies and habits.
Amount of coverage. Typical policy types are term life and whole life. Term policies are for periods of 10, 15, 25 or 30 years, depending on the insurer, whereas whole life typically covers you until you die. Most policies offer add-ons or riders to cover unexpected illnesses or disabilities, including children in your coverage or offers cash value that you can borrow against.
Your age. With aging comes a higher likelihood of filing a claim. Underwriters use formulas and tables to determine your odds of passing away within your gender and demographic, folding these odds into their overall calculations that determine how much you’ll pay.
Ten year term life insurance
Your occupation. If your job puts you in dangerous situations — for instance, mining or journalism — you’ll likely pay more than someone in editorial or accounting.
Your gender. Studies show that women tend to live longer than men, which typically results in lower premiums for women.
Your lifestyle. Underwriters consider how often and how much you drink alcohol, whether you participate in high-risk sports and adventures and even how well you drive on the road. But smokers tend to pay the highest premiums.
Your health history. If you have a pre-existing medical condition or a history of cancer, high blood pressure, diabetes, your insurer may charge more for coverage. It may even consider the health of your extended family when putting together a quote.
How much life insurance do I need?
Trying to determine how much coverage you need depends a lot on your specific lifestyle and who depends on you. For example, are you married with kids? Or are you just getting started in the real world?
If you’re considering applying for a life insurance policy, consider:
Your income. If you were to die unexpectedly or found yourself unable to work due to an illness or injury, how would your family cope without your income? Look for life insurance policies that are enough to replace your income until any debts are fully paid.
Your expenses. Do you own a mortgage, car loan, credit card or other debts? Calculate the ongoing expenses your family needs to maintain their current and future lifestyle.
Your dependents. If your family includes people who depend on you financially, consider their future needs. For instance, your children will likely go to college, or elderly parents might need care. Factor in any expenses your family depends on.
Your assets. Evaluate your stock shares, savings and retirement accounts and investment properties. Can your family comfortably live off these, or would you rather they continue letting those investments build?
How can I cut down my life insurance costs?
Your overall medical history and other factors may be out of your hands. But you can take a few steps to potentially lower your premium.
Quit smoking. If you’re a smoker, a logical step to reduce your premium — and improve your health — is to kick the habit as soon as you can. Doing so can help you avoid rates that are double or more that of a nonsmoker.
Cut down on drinking. A few drinks won’t have much of an effect on your rates. But if you tend to enjoy more than a drink a day, consider reducing your alcohol intake for lower rates.
Get in shape. Insurers consider your weight and how much you exercise an important part of determining risk. A lower BMI typically results in cheaper rates.
Consider major life changes. Your life insurance policy should change with your needs. For instance, after your children are grown and supporting themselves, you can often decrease your coverage.
Look for discounts. A trick to keeping more money in your pocket is to look opportunities to save. Talk with your provider about the possibility of cheaper premiums with a family or joint policy, rather than an individual plan.
Myths about life insurance
When deciding on a life insurance policy, your family’s protection and security are often at the forefront of your concerns. But many people opt out of the safety net life insurance creates because they don’t understand how it works within healthy financial planning.
Here are the top three reasons people cite for walking away from life insurance.
Life insurance agent
Life insurance is too expensive. It might sound difficult to factor in premiums for yet another insurance plan. But life insurance is a worthwhile investment that can prevent your family from dealing with debt and unnecessary hardship after you die. You can keep premiums low by buying only the coverage you need.
It’s a waste of money. Life insurance is designed to protect those you love in times of need. Consider how your family would cope if you were injured and unable to work? A life insurance policy could help them keep up with mortgage repayments, credit card debt and ongoing expenses.
Applying for coverage is a long, hard process. It’s true that many insurance providers require a medical exam and in-depth underwriting processes. But if you’re signing up for a long-term or whole life, the peace of mind that your family is protected could outweigh the one-time hassle. You’ll also find providers offering policies without medical exams with quick approval, though often with higher premiums.
To provide the data on this page, we averaged rates quoted by 14 life insurance companies for men and women in great health. We received these rates from Quotacy in 2018, which means they’re subject to change. Not all life insurance companies offer policies for all age ranges, however. Some age ranges may have been averaged from fewer companies.