Life Insurance Rates by Age: How Age Affects Your Premiums

We’ve put together a chart of term life insurance rates to give you an idea of how much it will cost you to purchase a policy at different ages. Note that whole life insurance rates tend to be much higher than term life insurance rates.

Life insurance companies rely on an involved underwriting process to determine specific rates and whether an applicant is insurable. In addition to your age, life insurance companies also consider the following factors:

• Type of coverage: Term life insurance plans generally have significantly lower rates than whole life insurance policies. No-exam life insurance plans are more hassle-free but can significantly raise your premiums.
• Your health class: Typically, younger Americans considered in excellent health can expect to pay the lowest for life insurance. Those with pre-existing conditions are often moved into higher rate classes. The health history of an applicant’s immediate family is often considered in the underwriting process as well.
• Your gender: Since women have a longer average life expectancy than men, on average, their rates are lower. As seen in the chart, a 35-year-old female can expect to pay an average of $25 monthly for a $500,000 term policy compared to $30 for a 35-year-old male for the same face value.
• Amount of coverage: Determining how much life insurance you need plays a large role in premium costs. The less coverage you buy, the lower the premiums. As you can see from the chart, a 25-year-old male buying $1 million in coverage will pay more than double the monthly rate for $250,000 in coverage. At age 55, the rate for $1 million in coverage will more than triple compared to $250,000 in coverage.

Health history has a significant impact on the average cost of life insurance. Generally, people in good health will pay lower rates than those with multiple health conditions. Underwriting departments tend to weigh some pre-existing conditions more heavily than others. Major pre-existing conditions like heart disease, stroke, diabetes or cancer usually have a greater impact on your premiums. More minor conditions like asthma, being overweight, high cholesterol or high blood pressure usually have a lower impact.

Lifestyle can also factor significantly into rates. Non-smokers are looked at more favorably than those who engage in tobacco use. Higher-risk activities such as skydiving, rock climbing, vehicle racing and rodeo can trigger higher rates or even jeopardize your coverage eligibility.

An important point to acknowledge is that being transparent when applying for life insurance is very important. Lying on a life insurance application constitutes insurance fraud. Intentionally omitting relevant information like medical conditions and lifestyle activities can result in an application being denied or death benefits not being paid to your beneficiaries.

Your financial obligations, current lifestyle and long-term plans will likely play important roles in determining what kind of coverage you obtain. If you can fit the monthly premium into your budget, your 20s are the best time to buy affordable term life insurance coverage.

If you have a spouse and dependent children who rely on you for financial support, your coverage needs will likely be more significant than a single, childless person. When you’re younger and healthier, you pose less risk to an insurer and are offered the most affordable rates. On the other hand, you may not necessarily be able to afford life insurance when you’re young. When shopping for life insurance, we suggest balancing your coverage needs with your budget considerations.

The type of life insurance policy you apply for will heavily impact premium rates.

• Term life insurance: These plans are considered “temporary” because they provide coverage over a defined term length before ending. The most common policies are 10-year term, 20-year term and 30-year term plans. For instance, 10-year term life insurance rates will be lower than a 20-year term life insurance policy with the same face amount, or death benefit.
• Whole life insurance: Unlike term life insurance, whole life insurance policies are considered permanent, lasting until the policyholder dies. Whole life insurance policies also feature a cash value component the policyholder can access while alive.
• Universal life insurance: Like whole life insurance, universal life (UL) insurance is a form of permanent life insurance with a cash value component. However, universal life insurance provides more flexibility than whole life insurance because policyholders can adjust their premiums and death benefits.

Purchasing life insurance is a major decision that requires determining which coverage best suits your financial needs. It can be beneficial to shop around for different rates and plans and examine add-ons and policy details before making a decision. We recommend speaking with a licensed life insurance agent or broker to go through your options.

Final expense plans can be an affordable way to offer peace of mind to you and your loved ones, especially if you have pre-existing medical conditions. Also known as burial insurance, final expense plans cover end-of-life funeral arrangements and do not require a medical exam. Final expense plans are a popular form of life insurance for seniors who are previously uninsured or underinsured.