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How Much Does Life Insurance Cost?

Life Insurance Cost

If you’re considering buying life insurance you may be asking yourself, how much does life insurance cost? In reality, life insurance is much more reasonable than you may think. In fact, some life insurance cost estimates suggest a 10-year, $250,000 life insurance policy can be bought as low as $15 and $17 per month for a healthy 40-year-old.

But you’re not interested in the national or statistical estimates, you want to understand what it might cost you. Well, there are a some factors, both within and outside your control, that will impact your rate. For instance, your age and gender isn’t something you control, but can affect your premium. However, avoiding risky activities, your weight and smoking habits are totally within your control, and have a material impact on premiums.

While averages and hypotheticals don’t directly speak to your situation, below provides an example of what the difference can be between males and females.

AgeCoverage amount: $250,000Coverage amount: $500,000
25 years oldMale: $13.48 Female: $12.18Male: $20.44 Female: $18.27
30 years oldMale: $13.48 >Female: $12.40Male: $20.44 Female: $18.70
35 years oldMale: $14.35 Female: $13.70Male: $22.62 Female: $20.88
40 years oldMale: $16.31 Female: $15.22Male: $26.10 Female: $24.36

Disclaimer: the above estimates are based on risk with minimal health problems, those without histories of major disease, have low cholesterol and normal blood pressure. The risks were all non-smokers.

What does affects your life insurance cost?

Life insurance cost factors out of your control

Well, there are two major factors that affect your life insurance premiums and they are simply out of your control: your age and your gender. Simply put, younger people pay less than older people for life insurance.

Why not?

Younger people are just less likely to have health problems. That’s just a natural reality.

As for gender, males generally pay more for life insurance because, statistically, they have shorter lifespans. Additionally, males tend to have more dangerous jobs, hobbies or lifestyles. Overall, males are just a more risky group to insure.

How is term life affected by age and gender?

The chart below provides term life examples and is broken out by gender and age. The chart illustrates that on average rates for males are higher than those for females. If you study the chart closely, you see that agent interacts with gender and that males progressively get more expensive than females as they age. For example, the average rates for 25 and 30-year-olds are nearly the same for both male and female, but as we get past 35-year-olds rates skew higher for males as their risk increases.

What are the life insurance factors we can control?

There are some factor that are within your control when it comes down to determining your life insurance cost. Here are a few:

  • Your health: Your medical history along with your weight and height will be used to determine your life insurance cost. What insures are looking for are chronic or serious illnesses that may impact your life expectancy. In fact, to get the most accurate underwriting, some insurers might require a medical exam before determining if they can provide coverage.
  • Your tobacco use: There is no shortage of information about the harmful affects of smoking tobacco. Therefore, it should come as no surprise that smokers typically pay higher rates than non-smokers. This is due to the number of medical conditions that are directly and indirectly  associated with smoking.
  • Your hobbies: Do you have an adventurous lifestyle? Maybe, but how adventurous? Enjoying some travel, hiking and camping is innocent enough, but if you sky-dive every weekend or race your motorcycle at the track, then you just may have higher premiums. However, what activities may put you in a higher risk class will depend on the insurance company.
  • Your behavior: If you indulge in bad behaviors, this could have an adverse affect on your life insurance cost. In fact, things like DUIs, previous arrests, or other criminal convictions may not only increase your rates, but could also disqualify you from coverage with some carriers.
  • Your employment: Just like your hobbies, if you have risky employment you may have to pay more for life insurance. Some employment, like law enforcement, firefighters, pilots, and construction workers are among those occupations that sometimes see higher life insurance rates.
  • Your personal finances: This one may be a bit more hard to understand, but bankruptcies or other risk factors contained in your credit report may impact your life insurance premiums. Your actual credit score will not. Additionally, long periods of unemployment may also affect your rate or ability to get coverage.
  • Your coverage selection: If it’s life, home or auto insurance, the amount of coverage you select will have a big impact on your premiums — more coverage simply means higher premiums.

What is the right amount of life insurance for me?

When considering how much life insurance is right for you, the rule-of-thumb is that you need enough to pay off your mortgage (if you have one) and any other debts. You also want enough to replace your income for for the estimated number of years your family would have counted on your financial support. If you are the primary breadwinner and you have children, you should also factor in the educational costs like private schools or college tuition. Lastly, funeral services can be expensive, you should consider an amount that would consider your end of life expenses. If you follow these basics, you can come up with a rough estimate of how much life insurance you need.

Learn more about choosing the right amount of life insurance.

How can I lower my life insurance rate?

You actually can have some influence on your life insurance cost. Most of the things within your control center around leading a healthy lifestyle. Here are a few things you can focus o right now:

  • Watch your weight: Carrying too much weight is liked to several health conditions that can shorten one’s life. If you can keep your weight within a healthy range for your height, you will appear less risky to the insurance carriers.
  • Do as the doctor tells your: If you have a diagnosis and are treating a medical condition, like high blood pressure or allergies, make sure to follow your treatment plan and regularly visit with your physician. Addressing your medical conditions will make you more less risky in the eyes of your insurer.
  • Quit smoking: Even a history of smoking will increase your premium, but stopping smoking will only help. The longer you have not smoked the better the potential to improve your premiums with some insurance carriers.
  • 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 not a habit.
  • Apply at a young age: The cost of a term life insurance policy is typically higher for someone who applies in their 40s or 50s, versus someone who takes out a policy in their 20s or 30s.

Pro Tip:

Have you recently quit smoking? If you’ve recently quit smoking then you should contact your insurance company to see what impact this may have on your premiums. In fact, if you’ve made any positivelifestyle changes, contact your life insurance company or quote around to see if you now qualify for a lower rate.

See how affordable life insurance can be by getting a customized quote today.

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