How Much Does Term Life Insurance Cost?

If you’re shopping for term life insurance, the first question that comes to mind is, how much does term life insurance cost. On average, the cost of term life insurance can range from $15 to $100 per month or more, which is $180 to $1,200+ per year.

Well, this is just a rough average to give you a glimpse of an overall estimate. Typically, term life insurance premiums are determined mainly based on age, gender, health, coverage type and amount, and most importantly, term length.

Essentially, this guide is designed to help you gain a comprehensive understanding of how term life insurance rates are determined, the key factors that influence your premiums, and tips to lower the cost.

How Much Does Term Life Insurance Cost?

Your term life insurance premium is calculated based on your estimated life expectancy and the length of your policy term. This is the reason factors such as term length, coverage amount, age, gender, and lifestyle choice are among the most crucial factors.

Statistically, women are expected to live longer than men. According to the CDC, the average life span for men is 75.8 years, whereas for women it's 81.1 years. This is the reason term life insurance is generally more expensive for men.

Based on Policygenuis’s research, it was found that the average cost of a $500,000 term life insurance policy for a term length of 20 years costs $30.2 per month for a healthy 20-year-old man, and $22.65 per month for a healthy 20-year-old woman.

Similarly, the term life insurance rate for the same term length and coverage is $102.5 for a healthy 50-year-old man, and $78.29 for a healthy 50-year-old woman.

These examples show how premiums can vary significantly based on age, gender, and health. To understand this further, here’s a breakdown of the average costs by age and gender for smokers and non-smokers.

Keep in mind that term life insurance rates are also influenced by location due to the average mortality rate in your area. If you’re located in Michigan and if you’re looking for a reliable insurance agency offering affordable term life insurance coverage, you should explore our extensive coverage options.

Average Cost of Term Life Insurance by Age and Gender for Non-Smokers

The table below shows the average cost of term life insurance by age and gender for healthy non-smokers with a death benefit of $500,000 for a term length of 20 years.

Source: NerdWallet

If you look at the age-based trend in term life insurance rates, premiums rise only slightly between ages 20 and 30, followed by a moderate increase through ages 40 to 50. However, starting at age 60, the rates climb sharply, reflecting the higher mortality risk associated with older age groups.

Average Cost of Term Life Insurance by Age and Gender for Smokers

The table below shows the average cost of term life insurance by age and gender for smokers with a death benefit of $500,000 for a term length of 20 years. Typically, smokers pay significantly higher rates due to the increased risk of mortality.

Source: NerdWallet

Unfortunately, due to increased health risks and higher chances of death, term life insurance costs way more for people who smoke. If you compare the average premiums with healthy non-smoker applicants, it’s a huge difference.

On average, a 20-year-old male or female has to pay 3 times more to purchase the same policy. On top of that, the rates here spike drastically after age 40 as there’s a higher chance of death due to smoking.

Factors that Affect the Cost of Term Life Insurance

Term life insurance premiums are influenced by several key factors, including your age, health, lifestyle, occupation, coverage amount, and policy term length. Understanding these key factors can help you make informed decisions and potentially lower your premiums. Here’s a closer look at each one.

Age and Gender

Generally, the older you get, the higher the chances of death due to illnesses and various health complications. Statistically, if you compare the mortality rates of both men and women, men have a lower average life span compared to women.

According to the CDC, men have an average life span of 75.8 years, whereas women live about 81.1 years. Given the fact that age and gender have a significant influence on your life span, your insurance rates will significantly depend on your age and sex.

Health

When it comes to determining your term life insurance rate, your health is a crucial factor, in fact the most important factor as it’s a direct parameter to evaluate and estimate your life expectancy. Typically, it is a requirement to answer health-related questions and provide your medical records, including prescriptions and test results.

So, depending on your current health conditions, your insurer will offer you a quote. If you’re young and healthy with no health complications or illness, you may qualify for an average or lower premium. However, if you have a chronic disease such as cancer, your term life insurance may double, triple, or even quadruple.

Lifestyle

Your lifestyle plays a significant role in determining term life insurance premiums. Healthy habits, such as a balanced diet, regular exercise, and sufficient sleep, can contribute to a longer life and lower premiums.

Conversely, risky behaviors like street racing, extreme sports, smoking, heavy drinking, or poor diet and sleep habits increase the likelihood of health problems and premature death. Insurers take these factors into account, so a riskier lifestyle usually means higher premiums.

Occupation

Your occupation, or work, can also influence your term life insurance rates. For instance, if you work in construction or mining, you’re exposed to a highly risky environment, which increases your chances of a premature death.

However, if you have a safe occupation, such as any desk job in a secure workplace, you’re likely to get a lower quote compared to professions that involve life-threatening conditions. So, yes, even your occupation matters when it comes to determining term life insurance rates.

Smoking and Tobacco Use

Smoking and tobacco use have serious health consequences, including chronic lung disease, heart disease, and lung cancer. Cigarette smoking is the leading cause of lung cancer.

Smoking other substances, such as marijuana, can also damage the lungs and contribute to chronic illnesses like bronchitis and asthma. Long-term use may increase blood pressure and the risk of cardiovascular problems.

This is the reason smokers need to pay two to four times more for term life insurance compared to non-smokers.

Choice of Coverage, Amount and Term Length

Your term life insurance premium is influenced by the coverage amount and term length you choose. Higher coverage amounts, like $1 million compared to $500,000, result in higher premiums, while longer terms increase cost because the insurer assumes more risk over time.

The type of coverage also affects rates. Policies with level premiums remain consistent throughout the term, while increasing or decreasing benefit structures may change your monthly cost.

Tips to Lower Your Term Life Insurance Premium

The potential cost barrier of term life insurance is, it increases with age, and if you develop any health condition, your premiums can significantly spike up.

Well, if you’re trying to reduce your term life insurance rate, you need to take certain steps to improve your health, perhaps by changing certain habits or your lifestyle. Here are some effective tips to help you lower your term life insurance premiums.

• Improve your health: Maintain a balanced diet, exercise regularly, and manage chronic conditions.
• Quit risky habits: Avoid smoking, excessive drinking, and other high-risk behaviors.
• Consider safer career options: If your current job is hazardous, switching to a lower-risk profession may lower premiums.
• Pay annually: Some insurers offer discounts if you pay your premiums in a single annual payment.
• Shop around: Compare quotes from multiple insurers to find the most competitive rate.

The Bottom Line: Invest in Term Life Insurance for a Safer Future

Typically, there are areas where you don’t have much control when it comes to any life insurance policy, including term life. This mainly includes your age and certain health conditions that have no cure.

If you want to ensure the financial safety of your loved ones, investing in term life insurance is the best investment for their future. If you’re exploring an affordable term life insurance policy in Michigan, you can contact us for a free quote today, or visit the nearest PLPD office in Flint, Saginaw  or Mt. Pleasant.

Our specialized term life insurance agents are here to guide you to ensure that your loved ones are adequately protected when the unexpected happens.

Frequently Asked Questions (FAQ)

How much does a $1,000,000 term life insurance policy cost?

On average, a $1 million term life insurance can cost you anywhere ranging from $30 per month to up to $400 or more, depending on your age, gender, health condition, lifestyle and various other factors.

How much is a $500,000 life insurance policy for a 60-year-old man?

For a healthy 60-year-old man, a $500,000 term life insurance policy typically costs around $196 per month for a 20-year term, which is about $2,350 per year. Premiums can vary based on health, lifestyle, and the insurer, so rates may be higher if the applicant has chronic conditions, a history of smoking, or other risk factors.

Is term life insurance worth the cost?

Yes, term life insurance is generally worth the cost for most people, especially if your goal is to protect your loved ones financially in the event of your untimely death. It provides a death benefit that can cover expenses such as mortgage payments, debts, education costs, and daily living expenses, giving your family financial security.

Term life insurance is typically more affordable than permanent life insurance, making it a practical option for those who want significant coverage without high premiums. While the policy only lasts for a set term, its cost-effectiveness and the peace of mind it provides often outweigh the expense.

At what age does term life insurance get expensive?

Term life insurance premiums generally start increasing significantly around age 40 to 45. While younger applicants (in their 20s and 30s) can secure affordable rates, insurers raise premiums as age increases because the risk of health issues and mortality grows.

Rates tend to climb even more sharply after age 50 or 60, making it more expensive to purchase large coverage amounts later in life. For this reason, buying term life insurance earlier can save you a substantial amount over the life of the policy.