Life insurance used to be cumbersome to research and purchase, but now it's easier than ever. Not only is there a wealth of information online about life insurance, you can compare free quotes and apply for life insurance policies in minutes right from your couch. So just how much does life insurance cost by age and gender anyway?
To find the answer, let's take a look at what factors impact the price of a life insurance policy. Then we'll take a look at average price ranges for life insurance by age below.
What Determines How Much Life Insurance Costs?
First of all, here are the main factors that determine how much life insurance costs:
- Your age
- Type of life insurance and duration
- Coverage amount
- Medical history
- Physical health status
- Mental health status
- Prescription usage
- Hospitalization history
- Prior surgeries
- Tobacco usage
- Family history of cancer
- Alcohol consumption
- Recreational drug use
- High-risk hobbies
- Occupational risk hazards
Age And Gender
The two main factors that determine how much life insurance costs are your age and gender. Typically, the younger you are the better your health and the longer your life expectancy. Therefore, the younger you are the cheaper life insurance tends to cost. No big surprises there.
Thus, it can be beneficial to purchase life insurance while you are still young to save money. If you plan to eventually get married and start a family, then getting life insurance beforehand is also a wise move. A lot of health issues can and will arise as we get older.
Like it or not, gender also plays a role in life insurance pricing. Men tend to die younger and thus pay more than women on average. Sorry gents!
And if you so happen to be transgender, unfortunately there's no set protocol. It's ultimately up to the insurer's underwriter to determine if your current gender or your gender at birth will be used.
Type, Coverage, Duration
The type of life insurance you purchase, term life insurance versus whole life insurance, also greatly impacts how much you pay. Term life insurance is much more affordable than whole life. Thus, term is the most commonly purchased type of life insurance.
Next, the amount of coverage you want, ie. the death benefit payout amount, also impacts price. Naturally, more coverage costs more money. And the length of time, or duration, of the life insurance policy also affects price. Longer coverage, higher cost. Pretty straight forward.
Where things can get complicated with pricing are your medical history. Expect to answer questions about smoking, alcohol consumption, and recreational drug use.
Life insurance companies also want to know if anyone in your family is diagnosed or has died from cancer. They typically also want to know if you or anyone in your family has ailments like diabetes, high blood pressure, cardiac arrest, etc.
Lifestyle And Occupational Risks
Generally, you're going to get the best pricing if you don't have any medical conditions, aren't taking any prescription drugs, and don't do any kind of high-risk activities.
If you are a skydiving enthusiast, scuba diver, pilot, roofer, or work with toxic chemicals expect to face higher premiums. Tempted to keep your high-risk hobbies or occupational risk hazards a secret?
I'd strongly advise against withholding information or lying on your application because it could leave your beneficiaries with nothing. Life insurance companies reserve the rights to deny claims if they determine a policy holder lied or withheld such information when the policy went into effect.
However, you have every right to seek a new occupation that's safer. Maybe you're a construction worker by day and a professional blogger by night. Saying you are a writer or blogger on your life insurance application is the truth.
What Does Not Affect The Cost Of Life Insurance?
While it may seem like everything under the sun can impact how much life insurance costs, the factors below have zero impact on policy pricing:
- Where you live
- Number of dependents
- The number of life insurance policies you hold
- Number of beneficiaries
- Sexual orientation
- If you have pets (unless you're the next Joe Exotic)
If you live in a skyscraper or a high-risk area for earthquakes, hurricanes or other natural disasters, that won't affect the cost of your life insurance policy.
But, you may want to consider buying natural disaster insurance. Living in an area prone to violence and crime also has no impact on life insurance premiums.
In addition, whether you have 0 kids and 1 beneficiary or 6 kids and 10 beneficiaries also has no impact on how much life insurance costs.
Although life insurance companies use gender to determine policy pricing, they can't discriminate on your race, ethnicity, or sexual orientation.
Average Cost Of Life Insurance For Men
Ok, so how much does life insurance cost on average for men in the US by age? Here's a look at typical rates for men between the ages of 20 and 60 (non-smokers, Preferred health rating). The term length is for 30 years and these are monthly costs, not yearly costs.
Remember, men have lower life expectancies than women. The average life expectancy for men in America is roughly 76.1 years according to the National Center For Health Statistics.
Average Cost Of Life Insurance For Women
Now let's take a look at the average cost of life insurance for women by age (non-smokers, Preferred health rating). Again, the term length is for 30 years and these are monthly costs, not yearly costs.
The average life expectancy for women in America is roughly 81.1, or a significant five years longer than the average male life expectancy. Therefore, if you are a woman, you should probably get a longer term life insurance policy at the margin.
When you compare the cost of life insurance by age and gender, it is apparent that women pay on average 10% – 20% less than men.
How Much Does Life Insurance Cost Me?
When I was 34 years old, I took out a $500,000 life insurance policy with USAA. It was a 30-year term life policy for $66.65/month. I thought that was a great rate at the time.
We always thought that USAA would provide the best rates because they were providing financial solutions to military members and their families. Sam's dad fought in Vietnam and his grandfather got a Congressional Gold Medal serving during World War II. Surely, we'd get the best life insurance rates possible.
We were wrong.
Fast forward to the summer of 2020. Sam and I decided it would be beneficial for me to try and increase my coverage now that we have two kids. Since we are both guardians who co-manage all our finances, it didn't make sense to have mismatched life insurance coverage amounts.
It didn't cost anything to look at life insurance quotes. I simply input my info into the free PolicyGenius marketplace. I quickly realized I was vastly overpaying for life insurance. For the past six years, I was paying $20 a month more for 50% less coverage!
Thanks to the ease of using PolicyGenius, I applied for a 20-year, $1,000,000 policy with Principal for $42.80/month. About three weeks later I was approved and I signed up right away.
Comparing my pricing to the average cost of life insurance for women in the above table, I'm pleased to see I'm paying $9.92 less per month than average ($52.72 – $42.80). Further, I've now got double the life insurance coverage ($1M vs. $500K) for less. Sweet!
Click on the calculator below to get your own quotes on Policy Genius right now.
Life Insurance Is A Must
There's nothing like a global pandemic to remind us that tomorrow is not guaranteed. If you have debt and dependents, getting life insurance is important.
It took a pandemic for Sam and I to realize that we had mismatched life insurance coverage amounts. Hopefully, this uncertain time will also encourage you to take action to ensure your loved ones are protected as well.
If you don't yet have a life insurance policy, want to find out if you're overspending on your current policy, or want to see how much it would cost to get an additional policy, I recommend you check out PolicyGenius.
PolicyGenius is an insurance marketplace that makes it super easy to get free life insurance quotes. Not only that, their reps can answer any questions you have when comparing policies. They aren't paid on commission so you don't have to worry about being up-sold.
Readers, when was the last time you shopped for life insurance? Are you surprised at the above pricing tables of the average cost of life insurance for men and women? What type of life insurance do you have now and how much are you paying a month? Do you know how much life insurance costs for your age, sex, and health?
For more nuanced personal finance content, join 100,000+ others and sign up for the free Financial Samurai newsletter. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009. Everything is written based off firsthand experience.