How Much Does Life Insurance Cost on Average? Rates by Location, Coverage, Age & Gender

Life insurance gives your beneficiaries a sum of money, often referred to as the death benefit, when you pass away.

Typically, the cost of a 20-year term life insurance policy with $500,000 in coverage is around $316.70 per year for a healthy 30-year-old man. However, life insurance rates can change based on various factors such as your age, gender and more.

• How Much Does Term Life Insurance Cost?
• How Much Does Permanent Life Insurance Cost?
• Calculating Life Insurance Costs
• How to Lower the Cost of Life Insurance
• Methodology

Term life insurance gives you coverage for a specified amount of time, anywhere from 1–30 years. How much does term life insurance cost? On average, a 20-year term with $500,000 in coverage for a 30-year-old healthy male costs $26.39 per month or $316.70 per year.

A policy with the same coverage and term length costs $285.47 per month or $3,425.60 annually for a 60-year-old healthy male. Between 30-year-old and 60-year-old men, there is a cost difference of $259.08 monthly or $3,108.90 annually for a similar policy.

What factors affect life insurance rates? The following factors play a role in determining your life insurance premiums:

• Coverage Type
• Term Length
• Coverage Amount
• Age
• Gender
• Health
• Smoking

Each factor can significantly change your life insurance premium. For instance, a 30-year-old healthy woman will pay $23.24 per month on average, or $3.15 less than a male counterpart for $500,000 in coverage.

Term life insurance costs heavily depend on the length of the policy’s term and your age. For instance, the cost of a 10-year term life insurance policy for a 30-year-old would be $221.25 per year on average, which is $1,424.47 less than the average cost of the same policy for a 60-year-old.

Meanwhile, 20-year term life insurance costs $297.81 per year on average for a 30-year-old and $3,011.16 annually for a 60-year-old. That's a difference of $2,713.35 per year.

Life insurance rates change because insurers take on more risk as you age. The closer you are to reaching your life expectancy, the more expensive coverage becomes. Additionally, growing old increases the likelihood of you getting health issues, making your premiums more costly.

The cost of life insurance doesn't vary significantly from state to state. However, average buyer characteristics, like age, height and weight, do vary based on location. MoneyGeek obtained quotes for every state in the U.S. based on the cost of life insurance coverage for the state's average buyer profile.

Colorado has the most affordable life insurance policies for both 10- and 20-year terms, with $250,000 in coverage at an average of $161.03 and $199.68 per year. Conversely, West Virginia has the most expensive average life insurance policy for a 10-year term at $242.95 annually, while Maine’s 20-year policies are the most costly at $260.75 per year on average.

Typically, the average consumer can get at least $250,000 in coverage in any state. Review the average cost of life insurance in each state below.

While $250,000 is the standard amount of coverage, this may not be enough to suit your needs. Considering that living costs — especially from state to state — and personal circumstances vary, MoneyGeek recommends that you get the average amount of coverage for your state. To calculate this, MoneyGeek considered each state’s per capita income, average mortgage debt and incremental debt.

On average, 10-year term life insurance costs $132.26 per year for $100,000 in coverage, which is typically the lowest amount of coverage you can get. Meanwhile, if you want $1 million in coverage, you can expect to pay roughly $384.65 per year on average for a 10-year term policy.

On the other hand, $100,000 in coverage for a 20-year term costs $151.12 per year on average, which is $408.65 less than the typical cost for $1,000,000 in 20-year term coverage.

While it may be tempting to get the lowest amount of coverage to save on insurance premiums, it’s important to get what’s right for your needs. After all, you want enough coverage to support your family financially and take care of other expenses after you pass.

30-year-olds pay much less in life insurance premiums than 50-year-olds. Case in point, a 20-year term life insurance policy with $500,000 in coverage costs around $809.47 less for a 30-year-old compared to the rate for a 50-year-old.

Gender also plays a significant role in determining life insurance premiums, largely because the life expectancy for American women is five years longer than it is for men.

To illustrate, a 10-year term life insurance policy with $500,000 in coverage would cost an average of $210.21 per year for women and $232.29 per year for men. For a 20-year policy with the same coverage, women pay an average of $278.93 annually, while men pay roughly $316.70.

Unlike term life insurance, permanent life insurance does not end or require renewal. There are two main types of permanent life insurance: whole and universal.

• Whole Life Insurance - Whole life insurance lasts throughout your entire life and has fixed premiums. It also includes two products: life insurance and an investment element. The investment is essentially a tax-free savings component that grows each year, which you can access via loan or withdrawal. Term life insurance does not have this benefit.
• Universal Life Insurance - A universal life insurance policy is a more flexible version of whole life insurance as it also offers a death benefit and investment. However, your premiums and death benefit can be changed throughout your life based on your needs or financial circumstances.

Note that permanent life insurance is often far more expensive than term life insurance, which is why it may not be for everyone. However, the long-term benefits of permanent life insurance can make the higher costs worth it.

For instance, the tax-free savings component can serve as a great source of income in times of financial need. In addition, the fixed premium rates of whole life insurance mean there will be no increased costs as you age, which can help with your budgeting and personal finances.

How much does permanent life insurance cost? The answer to this question is complicated because permanent life insurance has two components that need to be considered: life insurance and the cash value that grows over time.

In a nutshell, permanent life insurance lets you benefit from it even while you’re alive through the cash value component and ensures that your loved ones are protected through the death benefit.

The cost of both term and permanent life insurance can vary due to several factors, such as your age, gender, health and more. Because everyone is different, no two policies will be the same. For instance, your friend of the same age with the same coverage may pay more or less in premiums.

These are a few factors that heavily influence the cost of life insurance.

Insurers typically offer at least $250,000 in coverage, but this can go as high as $1 million and as low as $100,000, depending on the insurer and the state you’re located. The coverage amount you choose can affect your premiums drastically, so make sure to get a premium that suits your beneficiary’s needs and your budget.

Additionally, keep in mind that your family’s health history may be considered. If either side of your family has a history of tumors or cancer, your insurer may take that into account when determining your premiums. Your family history can factor into the state of your health as you age, which can also paint a picture of your expected lifespan.

Life insurance can be a confusing topic for anyone. If you’re not careful, you may end up paying more for coverage you don’t need. To help clear any confusion, take a look at a few commonly asked questions about this form of insurance.

To obtain cost data for term life insurance policies, MoneyGeek collected quotes from 13 companies across all 50 states for individuals ages 30–70.