The Average Cost Of Life Insurance By Age

average cost of life insurance by age

Key Takeaways:

  • The cost of life insurance overall has been dropping for years, but the cost of individual coverage goes up as you get older, so it’s advantageous to get a life insurance plan as soon as you need it! 
  • Even for people of the same age, the cost of a plan can vary depending on the type of life insurance, the risk profile of the applicant, location, and whether the product is underwritten or not.
  • The average cost of Everyday Life insurance plans are lower than other term life plans in the industry because we only give you as much coverage as you need!

Life insurance, in essence, is a transaction. You pay a company a certain premium every month in exchange for the guarantee of a set amount of monetary coverage that will be paid out to the policy’s beneficiaries if you pass away while the plan is still in effect. Depending on the type of plan you choose, you may be paying these premiums for anywhere to 10 to 30 years or for your entire life, which is a big financial investment! As with any transaction, but especially with one that lasts this long, you want to make sure that you’re getting the best deal. 

Luckily, consumers shopping for life insurance in 2021 have more options than ever before. This means that plan rates are more competitive and affordable, but it’s important to note that just because the cost of life insurance industry-wide is low, the rate of individual coverage does increase with age. A younger person needs more coverage because they (statistically speaking) have a longer life ahead of them, more debt, and younger dependents, but the rate per thousand – the cost of $1,000 of coverage – is lower for them because they are (statistically speaking) less likely to pass away. 

That’s why there’s an urgency to buying life insurance. Besides the obvious reason, which is that no one is guaranteed tomorrow, every day that passes for people who wait to get coverage increases the likelihood that they will pay more in premiums due to their age. 

The average 23-year-old is going to pay less for a life insurance policy than a 43-year-old will, for example. 

That’s why age is a good place to start if you’re looking to learn more about what drives the cost of life insurance. Learning more about the average cost of life insurance by age would ideally help you establish a baseline by which to compare plans and find the plan that will offer you the most coverage for the best price. 

Don’t forget other factors that influence cost 

However, while age is a good baseline to get an idea of how much you’ll pay for life insurance, it’s definitely not the only factor at play, which is why it isn’t as simple as saying “the average cost of life insurance for a 30 year old is $20 per month in 2021”. Even two people who are the same age may end up paying vastly different amounts for their plans based on details like:

  • Gender – Men, on average, pay more for life insurance than women do. 
  • Health factors – Things like your weight, medications you are on, chronic diseases you may have, if you smoke/have smoked, how regularly you exercise, and family health history may all impact how high your premium is because the company takes on more risk when insuring you if you have more health problems. The poorer/riskier your health is, the more expensive your coverage will be. 
  • Lifestyle factors – Certain occupations and hobbies are riskier than others. For example, if you like to skydive, or if you frequently travel abroad, or if you have a job as a roofer or construction worker, you can expect your premiums to be higher. 
  • Previous circumstances – If you’ve ever declared bankruptcy, or if you have a criminal record, or if you have any other events in your financial history that would cause the cost of insuring you to go up, then your premiums may be higher. 
  • Plan type – There are two main categories of life insurance: whole life (also known as permanent life) and term life. Whole life plans give you coverage – and require you to pay premiums – for as long as you are alive, while term life plans only last for a set number of years, typically between 10 and 30. Whole life plans are more expensive because they last longer and because the policy will be paid out when you die. With a term life plan, if something happens to you the policy will be paid out, but if the term passes without incident then the life insurance company’s risk ends, so that plan type’s premiums are cheaper!
  • Product – Whether or not the product is fully underwritten will affect how much you pay for a policy. Underwriting is a risk-assessment process. If the product is not underwritten, it means that you have the benefit of skipping the medical exam and perhaps not having to provide other details, but that convenience comes at a cost, and underwritten products are generally less expensive for the average consumer. It’s important to note that sometimes companies will give an initial quote based on information you provide, but the pricing is not finalized until the whole process is complete (regardless of whether or not the product is underwritten). Until you have applied and gotten an offer, don’t assume that the rate you’re seeing will be yours. You have to qualify first; if you have any health or lifestyle factors that may affect your risk level, you need to be cautious when comparing quick quotes. This is also why Everyday Life Insurance works hard to only recommend the plans that you are likely to be approved for!

Is there any data on the average cost of life insurance by age?

There is data available on what life insurance may cost based on age when you factor in some of the above characteristics, but it can be difficult to compare plans because how much your premium will be is really going to depend on your unique situation. 

Business Insider obtained quotes from four large insurance companies for two healthy people seeking $250,000 worth of term life coverage for a 30-year term. Here’s what they found, by age: 

We may not be able to get you extensive data on what your coverage may cost based on your age, because we don’t have any of your details, but we can show you the average cost of an Everyday Life plan based on age.

Average cost of $500,000, 20 year term life policy through Everyday Life

AgeMonthly Cost
Healthy Female
Healthy Male

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