What is the average cost of life insurance?

The average monthly cost of term life insurance for a 40-year-old female nonsmoker is $82.71 for $1 million in coverage, according to a March 2023 study by USNews.com. A 40-year-old male nonsmoker can expect to pay $103.21 for the same coverage.

Average cost of life insurance

Average cost of term life insurance by age

Here’s the average monthly cost of a $1 million term life insurance policy for a female nonsmoker with average health, according to USNews.com.

Here’s the same cost breakdown for a male nonsmoker with average health.

Average cost of whole life insurance by age

Whole life insurance can cost many times more per month than term life insurance. Here are the average costs for a nonsmoker in average health, according to the USNews.com study.

Average cost of term life insurance by health

Your health and family health history can affect what you pay for life insurance.

Preferred plus and preferred are the top two health classifications insurers use when calculating an individual’s policy premium. People qualify for these categories by having no more than two mild health conditions and no family history of life-shortening conditions such as cancer.

Here are the average monthly term life insurance costs for a $500,000 policy for a female, according to Policygenius.

And here are the average monthly term life insurance costs for a $500,000 policy for a male.

Cost of life insurance without a medical exam

A medical exam is typically part of the life insurance application process. However, no-medical-exam options exist that allow you to skip this step.

Instead of the exam, the insurance company may ask you to complete a questionnaire about your health. It may also check your medical records (prescription history and doctor’s records, for instance). No-medical-exam life insurance is available both as term life and as whole life policies.

The downside of no-medical-exam life insurance is that you usually pay more. You also tend to get less coverage, although Ethos Life offers no-medical-exam coverage of up to $2 million for a 30-year term. Depending on the policy, there may be other restrictions as well.

Everyday Life, with its RapidDecision Life insurance policy, allows you to undergo medical underwriting after the policy's issue date to qualify for additional policy benefits.

Which factors affect the cost of life insurance

What you pay for life insurance depends on a variety of factors. Some are within your control, while others are not.

The life insurance cost factors you can’t control

• Your age: As you age, your life expectancy decreases and the likelihood that the insurance company will have to pay your death benefit increases. This means younger people typically pay less for life insurance than older people.
• Your gender: Women have longer life expectancies than men in the U.S. For this reason, they typically pay less for life insurance than men.
• Your family health history: Genetic predisposition to deadly conditions such as heart disease, diabetes, or cancer can drive up your cost of life insurance.
• The amount of coverage you choose: Choosing a higher death benefit—say, $1 million instead of $500,000—will cause your life insurance premium to increase.

The life insurance cost factors you usually can control

• The policy type: You’ll pay significantly more if you choose a whole life insurance policy over a term life policy. In fact, whole life can cost many times more than term life for the same amount of coverage. As a form of permanent insurance, a whole life insurance policy remains in effect until the policyholder’s death—there is no set term. And part of a whole life premium goes to fund a policy feature called the cash value, which acts as an investment account for the policyholder. These features of whole life insurance make it much more expensive than term life.
• Term length: Term life insurance policies are typically available with terms lasting from one to 30 years. The longer the term, the more you can expect to pay per premium.
• Your occupation and hobbies: Having an occupation with a high fatality rate or engaging in a risky hobby, such as skydiving or race-car driving, can increase your life insurance cost.
• Your health: Many insurers ask you to take a physical exam before issuing you a life insurance policy. High blood pressure, high cholesterol, obesity, or pre-existing conditions such as cancer, diabetes, or heart disease can lead to a higher premium for life insurance.
• Tobacco use: Smokers are susceptible to a wide range of life-shortening health conditions, including cancer, heart disease, and chronic obstructive pulmonary disease (COPD). Because of this, being a smoker typically means paying more for life insurance.

What doesn’t affect your life insurance premium

While factors such as age, health, and gender can all contribute to what you pay for life insurance, there are several factors that an insurance company will not consider.

• Marital status: Studies have shown that married people tend to live a bit longer than unmarried people. Nevertheless, life insurance companies typically don’t consider your marital status when calculating what you pay for a policy.
• Number of beneficiaries: Your life insurance beneficiaries are the people you designate to receive the policy’s death benefit in the event of your passing. It’s typically a spouse and children. Whether you have one beneficiary or several, it won’t affect the cost of your insurance.
• Race, ethnicity, sexual orientation: Insurance is regulated at the state level. And while many states have laws strictly prohibiting the use of race, ethnicity, or sexual orientation when calculating the cost of a policy, there's no national anti-discrimination framework for insurers to follow. Recent studies support the notion that insurers don’t practice discrimination. Nevertheless, if you are concerned about your insurance company’s actions, contact your state's insurance department.

What about your credit history?

Many insurance companies use an applicant's credit history as one factor in determining the cost of auto or home insurance.

According to Experian, the practice is not as widespread in life insurance but is gaining ground. A growing number of life insurers check a person's credit history (readily available information) to help speed up the underwriting process. This is especially so for policies that don't require a medical exam.

How much life insurance do I need?

Deciding how much life insurance you need can indeed be a challenge. The more insurance you buy, the more you pay. But you also don’t want to skimp on this important coverage when you have beneficiaries (such as a spouse and children) who count on your income.

A simple approach is known as the 10X income formula:

• Multiply your income by 10.
• Add at least $100,000 per child to cover the cost of college.

So if you earn $75,000 and have three children, you’ll need about $1 million in life insurance coverage.

An independent financial advisor or insurance agent can work with you to understand your life insurance needs and set you up with a policy that works for your budget.

How can I pay less for life insurance?

Buy life insurance early

Young people have longer life expectancies and are more likely to be free of the chronic medical conditions that often strike later in life. For these reasons, insurers offer lower life insurance premiums to younger people. So even if you don't yet have any dependents—perhaps you’re in your 20s, fresh out of school and starting a career— consider buying life insurance now to lock in a low premium.

Get multiple life insurance quotes

As with any other type of coverage, the cost of life insurance typically varies among companies, according to the Insurance Information Institute. So be sure to get quotes from several to ensure you get the best price.

Companies such as Haven allow you to get a price quote and start an application online, making it easy to shop for insurance.

Find out whether your employer offers group coverage

Employer-subsidized life insurance can be a great way to get coverage at a lower cost than purchasing it yourself. One caveat: Leave or lose your job and this coverage vanishes. Think about augmenting an employer policy with a private one.

Develop good health habits

Insurers tend to offer lower life insurance premiums to those who don’t smoke, are at a healthy weight, and have other indications of a healthy lifestyle (such as a lower cholesterol level).

If possible, adjust your coverage as your needs change

If you have the option to do so, adjust your coverage level as your life and needs change. If you believe you no longer need the $1 million death benefit you purchased 10 years ago, ask your insurer if you can adjust it to, say, $500,000.

Ladder Life Insurance offers flexible coverage you can adjust as your needs change.

TIME Stamp: Life insurance is a pillar of financial planning

According to current estimates, a $1 million term life insurance policy for a healthy 40-year-old nonsmoker costs around $80 to $100 per month. The cost of life insurance can vary based on age, health, type of policy, and other factors.

The expense of life insurance may seem like a difficult pill to swallow. But it provides essential financial protection to the people who love and depend on you, such as your spouse and/or children. Responsible personal financial planning depends on it.

Methodology

We reviewed recent online studies of life insurance premiums by USNews.com and Policygenius. These studies were accessed on June 12, 2023. Please note that this information is for comparative purposes only. Your premium will reflect your profile and may be different from the figures shown in this article.

Frequently asked questions (FAQs)

How much does whole life insurance cost per month?

According to a March 2023 study by USNews.com, a 40-year-old female nonsmoker can buy $1 million in whole life insurance for $1,003.06 per month. A 40-year-old male nonsmoker can buy the same coverage for $1,224.72 per month.

How do I check life insurance rates?

Many insurance company websites offer free online quotes. You can also contact an independent agent. These agents typically represent multiple insurance companies and can shop around on your behalf to ensure you get the cheapest life insurance rate.

What is the best life insurance company?

Bestow Insurance and Haven Life were named the top two life insurance companies in a June 2023 study by USNews.com.