What Factors Affect Term Life Insurance Cost?

Term life insurance costs vary from person to person. Insurers use several factors when calculating premiums, including your age, health, lifestyle and policy choices.

Learn what factors affect term life insurance cost and how to find affordable coverage.

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Written by Mark Fitzpatrick

Updated: December 12, 2025

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Key Takeaways

Age matters most. Premiums increase as you get older. According to MoneyGeek's analysis, a 30-year-old nonsmoking male pays $36 monthly for $500,000 in coverage. By age 50, that jumps to $128.

Smokers pay double or triple. Quitting tobacco for 12 months or longer may qualify you for nonsmoker rates, lowering your life insurance premium.

Shop multiple insurers. The same applicant gets varying rates from different companies. Compare at least three to five quotes before buying.

Personal Risk Factors That Affect Your Life Insurance Premium

Insurance companies look at your individual risk profile to calculate life insurance premiums. These personal factors predict how likely the company is to pay a death benefit during your coverage period.

Age

Age affects term life insurance costs more than almost any other factor. For example, a 30-year-old nonsmoking male pays $36 monthly for a 20-year, $500,000 policy. By age 50, that same coverage costs $128 monthly (more than three times higher). The increase gets steeper as you get older. A 60-year-old pays an average of $254 monthly.

With level term policies, your premium locks in at purchase and stays the same throughout the term. Buying earlier means locking in lower rates for the life of the policy.

Gender

Women pay less than men for the same coverage because they have longer average life expectancies. Here's what we found: a 40-year-old nonsmoking female pays $46 monthly for $500,000 in coverage, while a male the same age pays $55, which is about 20% more.

Some states prohibit gender-based pricing: California, Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania have restrictions. In these states, unisex rates may apply. Check with your state's insurance department for current regulations as laws may change.

Health Status and Medical History

Insurance providers check your current health through medical exams, health questionnaires or prescription history checks. Insurers assess your BMI, blood pressure, cholesterol levels and blood sugar.

Pre-existing conditions like diabetes, heart disease and high blood pressure can result in higher premiums. Underwriting classifications or health-based rate categories (Preferred Plus, Preferred, Standard Plus, Standard, Substandard) determine your rate tier based on your health profile.

Medical exam requirements vary by coverage amount and insurer. Some policies under $250,000 may qualify for simplified underwriting

Tobacco and Nicotine Use

Smokers pay roughly two to three times more than nonsmokers for comparable coverage. Our analysis shows a 40-year-old nonsmoking male pays $55 monthly for $500,000 in coverage, while a smoker the same age pays $170 (more than triple). This applies to cigarettes, cigars, pipes, vaping and smokeless tobacco.

Most insurers classify you as a smoker if you've used any tobacco product within the past 12 months. Quitting for 12 months or longer may allow you to requalify for nonsmoker rates.

Family Medical History

Insurers review your immediate family's health history, focusing on parents and siblings. A history of heart disease, stroke, cancer or hereditary conditions may increase premiums.

Premature death of parents or siblings from illness concerns underwriters because such deaths suggest potential genetic risk factors.

Lifestyle and Behavioral Factors Affecting Life Insurance Rates

Beyond your health, insurers evaluate how you live your life. Risky behaviors and dangerous activities can increase your mortality risk and drive up premiums.

Occupation and Hobbies

High-risk jobs like mining, logging, roofing, commercial fishing and piloting result in higher premiums. Office workers and professionals typically pay less.

Dangerous hobbies also increase premiums: skydiving, scuba diving, rock climbing, motorsport racing and private aviation all suggest higher risk. Frequency matters, and different insurers assess hobby risk differently.

Driving Record and Alcohol Use

Insurers can access DMV records during the underwriting process. DUIs, reckless driving and multiple violations signal risky behavior and can increase premiums. Most insurers focus on the last three to five years.

Excessive alcohol use can also increase premiums, assessed through medical exams or application questions.

Policy-Specific Factors that Affect Life Insurance Costs

The coverage you choose directly affects what you pay. Term life insurance provides temporary financial protection for your beneficiaries. Unlike permanent life insurance, term policies don't build cash value, which keeps premiums lower

Coverage Amount and Term Length

Higher coverage means higher premiums, though the increase isn't proportional. MoneyGeek's data shows a 40-year-old nonsmoking male pays $55 monthly for $500,000 in coverage and $99 for $1 million. Doubling the coverage increases the premium by about 80%.

Common terms include 10, 15, 20, 25 and 30 years. Longer-term policies cost more because the insurer covers your risk for an additional number of years. Match your term length to your coverage needs: consider when your mortgage will be paid off, when your children will be financially independent and when you plan to retire.

Use our life insurance calculator to calculate how much life insurance you need.

Premium Structure and Riders

Level premiums stay the same for the entire term, providing predictable budgeting. Annual renewable term policies start lower but increase each year.

Optional riders customize coverage but add to the cost. Common riders include waiver of premium, accelerated death benefit, child term rider and return of premium. Evaluate whether each rider aligns with your needs before adding it.

Insurer and Market Factors Impacting Your Life Insurance Rates

Each insurer uses its own underwriting formula, so the same applicant can receive varying quotes depending on the company. Some insurers are more lenient with certain health conditions or lifestyles. Interest rates, inflation and investment returns can also influence pricing.

Insurers use mortality tables (life expectancy data) as the foundation for premium calculations, with expense loading added for administrative costs and profit margin.

Compare quotes from multiple providers to find the cheapest life insurance that provides the best value for your family.

How to Lower Your Term Life Insurance Premium

While you can't control your age or family history, you can take practical steps to find more affordable coverage.

1
Buy early
Premiums increase with age. Locking in a policy while you're young means paying less for the life of your term.
2
Quit smoking
Smokers pay more than nonsmokers for the same coverage. Wait 12 months tobacco-free before applying to qualify for nonsmoker rates.
3
Improve your health
Lose weight, lower cholesterol and manage blood pressure before your medical exam. Small improvements can move you into a better rate classification.
4
Shop around
Each insurer uses different underwriting criteria, so quotes vary. Compare options from multiple insurers to find the best rate for your profile.
5
Right-size your coverage
Calculate your actual needs based on income replacement, debts and future expenses. Doubling your coverage doesn't double your premium, but it still adds to your cost.
6
Pay annually
Many insurers offer discounts for annual payments versus monthly billing because it reduces administrative costs.
7
Skip unnecessary riders
Only add optional riders you need. Each one increases your premium.

What Factors Impact the Cost of Your Life Insurance Premium: Bottom Line

Term life insurance costs depend on personal factors like age, gender, health and lifestyle, combined with policy choices including coverage amount, term length and optional riders. While you can't change your age or family history, you can improve your health, compare quotes and make smart policy decisions to find affordable coverage.

Consider consulting with a licensed insurance professional for personalized guidance.

Factors That Affect Life Insurance Premiums: FAQ

Can I lower my life insurance premium after my policy is issued?

With level term policies, your rate is locked in for the term. If you've made major lifestyle changes like quitting smoking for 12 months or longer, some insurers allow you to request a rate reconsideration.

Is term life insurance cheaper than whole life insurance?

Yes. Term life insurance costs less than whole life insurance because it provides coverage for a set period and doesn't include a cash value component.

What health conditions affect life insurance rates the most?

Conditions that affect rates include heart disease, diabetes, high blood pressure, high cholesterol, cancer history and obesity. Well-managed conditions may still qualify for standard rates depending on the insurer.

About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.

Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!

He writes about economics and insurance, breaking down complex topics so people know what they're buying.

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