Our editorial team follows a strict methodology for reviewing life insurance companies.
Although factors like your medical history, tobacco use, weight and family health history are important, life insurance companies base monthly costs primarily on your age. After all, the older you are, the closer you are to reaching your life expectancy. This means a higher risk to the insurance company of having to pay death benefits to your beneficiaries.
Fortunately, even if you have health challenges or are getting a bit older, there can be affordable life insurance options to fit your needs. Whatever your age, we at the MarketWatch Guides team are ready to help you make an informed decision on the best life insurance options.
The listings that appear are from companies from which this website may receive compensation, which may impact how, where and in what order products appear. Not all companies, products or offers were reviewed in connection with this listing.
Impact of Age on Life Insurance Rates
Based on our research, the average monthly rate for life insurance is $22 for a 30-year-old, $32 for a 40-year-old and $80 for a 50-year-old. 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.
| Gender | Age | $250,000 in coverage | $500,000 in coverage | $1M in coverage |
|---|---|---|---|---|
| Male | 25 | $17 | $27 | $44 |
| Male | 35 | $19 | $30 | $52 |
| Male | 45 | $35 | $61 | $113 |
| Male | 55 | $82 | $150 | $283 |
| Female | 25 | $14 | $21 | $33 |
| Female | 35 | $16 | $25 | $43 |
| Female | 45 | $28 | $48 | $87 |
| Female | 55 | $60 | $108 | $207 |
Do Life Insurance Rates Increase With Age?
Yes, life insurance rates increase with age, as it is the biggest factor in determining your life insurance rate. Insurers emphasize your age when determining rates because it can predict how likely you are to use the policy’s benefits. Life expectancy is a primary factor in life insurance costs, so younger people typically pay the lowest rates for coverage.
Factors Beyond Age Affecting Rates
Life insurance companies rely on a sophisticated underwriting process to determine specific rates and decide 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 come with less hassle but significantly higher premiums.
- Your health class: Typically, younger Americans deemed to be 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 medical history of an applicant’s immediate family members are often considered in the underwriting process as well.
- Your gender: Because women have a longer average life expectancy than men, their life insurance rates are typically 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: The amount of life insurance coverage you purchase plays a major role in the premiums you pay. 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 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 the greatest 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 play a major role in determining life insurance rates. Non-smokers are viewed more favorably than those who engage in tobacco use. Higher-risk activities such as skydiving, scuba diving or rock climbing can trigger higher rates or even jeopardize your coverage eligibility.
It’s important to note that being transparent when applying for life insurance is critical. 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.
Choosing the Right Coverage for Your Age
When considering how much coverage you need, you need to think about your financial obligations, current lifestyle and long-term plans. If you can fit the monthly premium into your budget, your 20s are the best time to buy affordable term life insurance coverage, according to our research.
If you have a spouse and dependent children who rely on you for financial support, you’ll need more coverage 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 in your 20s or 30s. When shopping for life insurance, we suggest balancing your coverage needs with your budget considerations.
Comparing Different Types of Life Insurance Policies
The type of policy you choose is another major factor in how much you pay for life insurance. Here’s a brief overview of each basic type of coverage:
- Term life insurance: These plans are considered “temporary” because they provide coverage over a defined term length before ending. The most common terms are 10 years, 20 years and 30 years. Rates for a 10-year term life insurance policy 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 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.
The listings that appear are from companies from which this website may receive compensation, which may impact how, where and in what order products appear. Not all companies, products or offers were reviewed in connection with this listing.
Frequently Asked Questions About Life Insurance Rates by Age
Rates are dependent upon many factors as discussed above. Besides age, underwriting companies consider other factors like your chosen type of coverage, health class, lifestyle and gender.
Life insurance rates increase as you age because advanced age generally corresponds to health complications or a shorter life expectancy. Since insurance companies assume a greater risk of having to pay a death benefit, older applicants can expect to pay higher premiums.
With every birthday, your potential rate for a new life insurance plan increases as you get closer to your life expectancy. However, your rate for coverage is locked in at the time of purchase.
If you want affordable coverage, a general guideline to buying life insurance is the earlier, the better. It may benefit you to speak with a licensed insurance agent or financial professional about the best time to buy life insurance based on your specific circumstances and financial goals.
