Life Insurance Cost: Average Rates & What Drives Them

Life insurance pricing is mostly about the insurer's estimate of how long you will live. Age, sex, health, tobacco use, the amount of coverage, and the type of policy all feed into the monthly premium. The same person can see a very low price for one kind of policy and a very high price for another.

This guide uses published averages for a standard example: a nonsmoker in average health who buys a 20 year term policy with a face value of half a million dollars. It then shows how the price changes with age, coverage size, term length, policy type, and tobacco use. Treat the numbers as reference points. A calculator or a licensed agent can produce quotes for your own profile.

Age is the biggest factor for term life. Each row above shows a range from the average woman's rate to the average man's rate. The price rises slowly through the late 20s and 30s and then climbs fast in the 50s and 60s.

Buying early locks in a lower premium for the full term. A policy bought at 25 costs far less per month than the same policy bought at 50, and the rate stays fixed for the term.

Term life covers a set number of years and pays out only if you die during that period. Permanent policies, such as whole life and universal life, last for life and build cash value, which is why they cost more.

The comparison uses the same face value and the same 40 year old. The gap between term and permanent policies is wide, so the policy type you choose changes the monthly budget more than almost anything else. Tobacco use is the other large factor, as the smoker row shows.

Doubling the coverage does not double the premium. Per dollar of coverage, bigger policies are cheaper. Longer terms cost more because the insurer guarantees the rate for more years.

If you want an exact figure for a given amount and length, use an insurer's online calculator or ask an agent for several quotes at once. Rates change with underwriting, so the final price can differ from an average.

NerdWallet quotes premiums per year for a 40 year old man buying a 20 year term policy.

The annual numbers show the same pattern: smokers pay several times more, and whole life costs far more than term.

The two sources measure different things. One is an average across a larger sample of ages and profiles. The other uses a broker's marketplace data for a 40 year old who is assumed to be in good health. The difference is large, and it may come from health class, how the average is calculated, and which insurers are in the data. Every figure assumes a nonsmoker in good or average health. A person with a health condition, a dangerous job, or a history of tobacco use is likely to see a higher price.

• Age: older buyers pay more.
• Sex: women usually pay less than men at the same age.
• Health class: preferred classes cost less than standard.
• Tobacco use: smokers pay far more.
• Term length and coverage amount.
• Whether a medical exam is required. No exam policies cost only a little more than standard term, according to MoneyGeek.
• Riders, which are optional add ons.

Gather your date of birth, height and weight, tobacco history, and medical details. Ask for quotes from several insurers, and compare policies of the same length and amount. A licensed life insurance agent or an independent broker can quote many companies at once.