Life insurance can provide financial assistance to your loved ones after you pass away. But how much does life insurance cost? The answer isn’t straightforward. Life insurance costs vary based on several factors, including your age and gender, the death benefit amount you purchase, the type of policy you buy and your health. Because each policy type covers you differently, the cost varies. Bankrate can help you understand the average cost of life insurance, so you can decide if a policy is right for you.

How much is life insurance?

The cost of life insurance depends on several factors, including your age, gender, overall health, the type and term of the policy and how much coverage you purchase. Generally, the healthier and younger you are, the lower your premium will be. Typically, adult women are cheaper to insure as well since they tend to have longer life expectancy than adult men according to the CDC. It helps to get life insurance quotes from several carriers and make sure you are comparing the same products.

When it comes to life insurance, the average cost is not an easy metric to track. Life insurance companies do not report premium data (other than the total amount of premium they write in a year), which may be to protect their policyholders’ privacy.

The average cost of life insurance from a given company would generally reflect its policyholders’ overall age and health. A company with higher average premiums could theoretically be insuring either older policyholders, policyholders with poor health or a combination of the two. Therefore, revealing average life insurance cost data could jeopardize the privacy of a company’s insureds.

Factors that determine your life insurance cost

When considering coverage, people often wonder, “How much is life insurance?” or, “How much is life insurance per month?” The answer is: it depends. Life insurance providers take many factors into account when determining your eligibility for coverage and your premium. To better understand life insurance costs, thinking of them from the perspective of insurance providers can be helpful to grasp how rates are based.

It’s best to be completely honest when submitting a life insurance application to ensure your coverage terms match your circumstance and avoid your policy being voided. Through medical exams, health questionnaires and other underwriting checks, insurance companies are able to determine things like whether you drink or smoke or regularly engage in risky activities. If you lie about your health status and manage to get a policy at a cheaper rate, you run the risk of your policy being canceled or your death benefit payout being denied by the insurance company.

Health

Your health plays a huge role in the cost of life insurance. If you use tobacco products, that will typically raise your premium significantly. Marijuana use can also impact your life insurance premium, depending on the company. Additionally, several types of life insurance require that you undergo either a health questionnaire or medical exam before approving you for a policy. Guaranteed-issue life policies do exist and may be an option for customers with more severe health problems who want to forego the medical exam.

Suppose you choose a policy that requires a medical exam. In that case, a company-approved nurse may visit your home, gather information about your and your family’s health history and check health metrics, like your blood pressure and resting pulse rate. In some cases, the nurse may even take a blood sample. You may also have the option to do a medical assessment at a doctor’s office.

Age

The older you are when you request a policy, the more likely it is that the insurance company will have to pay the benefit before the policy expires. Because of this increased risk, the price of life insurance generally goes up as you age. This is why many financial experts recommend that you buy life insurance when you are young, so you can potentially benefit from sustained lower premiums. If you buy a permanent life policy at a young age, you’ll likely enjoy lower costs for your entire life. The premium on term policies stays the same throughout the term, but if you want to renew your coverage, you’ll likely see an increase based on your new age.

Gender

Women statistically have a longer life expectancy than men, so males represent a higher risk to life insurance companies. Based on this, life insurance costs are typically more expensive for males than females of the same age and health.

Death benefit amount

Another factor affecting the cost of life insurance is the amount of coverage you need. For example, if you want a policy that provides financial assistance for your funeral expenses and are only seeking $50,000 in coverage, you will likely pay far less for this than you would for a policy that provides a $1 million death benefit upon passing away.

Type of life insurance

There are several types of life insurance you can choose from. Term life insurance rates are generally cheaper than permanent life insurance rates. Term life insurance is only effective for a set period — typically 10, 20 or 30 years. Permanent life insurance, including whole life and universal life, only ends when you choose to cancel or stop paying the premiums. Because permanent policies are designed to stay in place until you pass away (unless you cancel the coverage or it lapses), the insurance company is far more likely to pay out the death benefit than it would with a term policy. Permanent life policy rates are typically higher to compensate for the increased risk.

Job

You might be surprised to learn that what you do for a living can also impact how much you pay for life insurance. If you are in a dangerous profession such as construction, war reporting or law enforcement, you could face more daily risks than an office worker. Because of this added risk, you might pay a bit more for life insurance.

Lifestyle

Your lifestyle can also impact your life insurance cost. You will likely pay more for life insurance if you drink alcohol regularly or participate in high-risk activities such as skydiving. The increased risk of death with these activities will typically cause insurers to charge you more in premiums to compensate. Additionally, traveling to war zones, such as Ukraine or Russia, is considered a major risk by most life insurers and could lead to your policy application being denied.

Factors that don’t impact your life insurance cost

Although there are many factors that contribute to your life insurance premium, there are also some criteria that don’t impact the cost.

  • Location: Unlike with auto or property insurance, your location will not affect the cost of your life insurance. You will need to provide your address on the life insurance application, but it has no impact on the cost.
  • Credit score: Your credit score is not directly factored into your rate, although life insurance companies may run credit checks, which typically use your credit-based insurance score. Other elements of your credit history may affect your rate to a certain degree, such as a history of missed payments or filing for bankruptcy.

Life insurance companies care most about factors that impact your life expectancy, such as your current health and family medical history, which could contribute to health issues in the future. If an insurance company believes you have an increased risk of passing away prematurely, you’d see a higher rate that reflects that risk.

How much life insurance do I need?

Everyone has different life insurance needs. To figure out how much coverage is right for you, it’s important to look at your unique circumstances. Specifically, some of the things to think about are your dependents, your lifestyle, your current financial situation and your goals for the future.

For example, if you have several young children and are the sole income provider for your household, you may need a significant amount of coverage to protect your family in case something happens to you. On the other hand, if you are single and have a healthy savings account, with no outstanding debt, you probably require considerably less coverage.

Frequently asked questions