What affects the cost of life insurance?
The life insurance cost factors you can't control
Two of the biggest influences on life insurance rates are also the ones you can't control: age and sex. Generally, younger people pay less than older people because they're less likely to have health problems. And the cost of life insurance tends to be more for males because they have shorter lifespans and are more likely to have dangerous jobs or lifestyles, making them riskier to insure overall.
Term life insurance rates by age and sex
The life insurance rates by age chart below provides examples of the average term life insurance costs for males and females, 20 to 60 years old, quoting a 10-year term policy through eFinancial. As you can see, the average life insurance cost per month is generally higher for men than women. Plus, the average rates for 20- and 30-year-olds are nearly the same, while those for 40-year-olds skew higher as a result of increasing risk.
| Age | Coverage amount: $250,000 |
|---|---|
| 20 years old | Coverage amount: $250,000 Male: $13.48 | Female: $12.17 |
| 30 years old | Coverage amount: $250,000 Male: $13.48 | Female: $12.40 |
| 40 years old | Coverage amount: $250,000 Male: $16.31 | Female: $15.22 |
| 50 years old | Coverage amount: $250,000 Male: $32.84 | Female: $29.36 |
| 60 years old | Coverage amount: $250,000 Male: $74.82 | Female: $56.98 |
Note: Quoted life insurance rates are based on Fidelity Life Association's best-published monthly premium rates for 10-year RAPIDecision Life policies for a face amount of $250,000 as of May 22, 2020. RAPIDecision Life is available to people who are between the ages of 18 and 65.
Whole life insurance rates by age and sex
The following chart compares the average rates for final expense insurance (a type of whole life insurance) for males and females, ages 50 to 70, at $35,000 in coverage. Since this final expense policy is only available starting at age 50 when health risks are already higher, you'll see that the potential rates can increase with each year. A whole life policy also costs more than a term policy since coverage lasts your entire lifetime and the policy has cash value. Learn more about the difference between term and permanent life insurance.
| Age | Coverage amount: $35,000 |
|---|---|
| 50 years old | Coverage amount: $35,000 Male: $125.18 | Female: $94.54 |
| 60 years old | Coverage amount: $35,000 Male: $174.17 | Female: $135.68 |
| 70 years old | Coverage amount: $35,000 Male: $263.42 | Female: $209.16 |
Note: Quotes based on monthly rates for male and female non-tobacco users for Fidelity Association's RAPIDecision Final Expense policies for a face amount of $35,000 as of May 22, 2020. Rates and products available may vary by state. All policies are subject to underwriting approval. RAPIDecision Final Expense is available to between the ages of 50 and 85.
The life insurance cost factors you can usually control
- Your health: Insurers typically look at your height, weight, and medical history — especially any chronic or serious illnesses you've experienced. Standard policies require a medical exam before determining your eligibility, though there are some life insurance policies that don't require a medical exam.
- Tobacco use: Life insurance for smokers usually comes with higher rates than for non-smokers due to the number of medical conditions associated with smoking, including cancer.
- Hobbies: If you sky-dive or partake in amateur stock car racing, you might have higher premiums than someone who collects stamps. However, the activities insurers consider risky vary by company.
- Criminal history: DUIs, previous arrests, and other criminal convictions may affect your rate or even disqualify you from coverage with some insurers. Learn about insurance and DUIs.
- Occupation: As with hobbies, the riskier your job, the more you could pay for life insurance. Police officer, firefighter, pilot, and construction worker are just a few of the occupations that may see higher life insurance rates.
- Financial history: Your actual credit score won't affect your premium, but any bankruptcies or other risk factors identified in your credit report may. Long periods of unemployment may also affect your rate or ability to get coverage.
- Coverage amount: As you'd expect, the amount of coverage you select will change your life insurance rate — more coverage means higher rates.
What's the right amount of life insurance for me?
You want enough life insurance to pay off your mortgage and any other debts, as well as enough to replace your income for however many years your family would need support. If you have kids, you should also factor in the total cost of their tuition, whether it's for college or private K-12 school. Finally, calculate your potential funeral expenses to get a rough idea of how much life insurance you need. Then use our life insurance calculator.
How can I lower my life insurance rate?
There are several ways to lower your life insurance rate, most of which center on maintaining a healthy lifestyle:
- Keep a healthy weight: Being overweight is linked to medical conditions with higher mortality rates, such as heart disease. Staying within a healthy weight range can make you less risky to insurers.
- Manage your medical conditions: If you have an ongoing medical condition, such as asthma, high blood pressure, or diabetes, make sure you're following up with your doctor and sticking to your treatment plan. Learn about life insurance for diabetics.
- Stop smoking: This includes using e-cigarettes, which most insurers view the same as smoking. The longer you go without smoking, the better your rate could be.
- Avoid high-risk hobbies: The less frequently you engage in high-risk activities, the lower your rate could be. So you can still go sky-diving, as long as it's only occasionally.
- Apply early: The cost of a term life insurance policy is typically higher for someone who applies in their 40s or 50s, compared to someone who takes out a policy in their 20s or 30s. Learn more about when to get life insurance.
If you've stopped smoking or made other positive lifestyle changes, contact your life insurance company or quote around to see if you could get a lower rate.
See how affordable insurance can be. Get a customized life insurance quote today.
