Average Life Insurance Rates 2021: How Much Does It Cost?

Tom Griffiths

Mar 11, 2021

•  4 min read

1.

Average Life Insurance Rates By Policy Type

2.

Average Term Life Insurance Rates By Age and Gender

3.

Average Term Life Insurance Rates By Policy Size

4.

Average Term Life Insurance Rates By Policy Length

5.

Average Term Life Insurance Rates By Health

6.

Final Thoughts

Tom Griffiths

Mar 11, 2021

•  4 min read

TL;DR: The average cost of life insurance is $44 a month. This is based on data from S&P Global and includes both term and permanent life insurance. There are many factors that affect life insurance rates including; the insurer, type of policy, coverage amount, age, gender, and health of the applicant.

Learn more about how life insurance with our Life insurance 101: The ultimate guide.

Average Life Insurance Rates By Policy Type

Policy Face ValueTerm Price (monthly)Whole Life Price (monthly)
$250k$17.94$200.76

The rates in the table above are based on a policy size of $250k for a 30 year old non-smoker in ‘excellent’ health.

In almost every situation, term life insurance is likely the best choice for you.

As you can see, the above table shows whole life insurance is nearly 10 times the price as term for the same coverage. This makes it difficult for someone to get the right amount of coverage with a Whole Life Policy that falls within their budget.

At Bello, we offer life insurance that we would buy or recommend to our friends and family. That's why we only offer term life insurance.

If you want to read more you can check out our Term vs. Whole life article.

Average Term Life Insurance Rates By Age and Gender

AgeFemale price (monthly)Male price (monthly)
20$16.57$18.48
30$17.02$18.87
40$23.68$27.22
50$45.75$57.83
60$120.94$169.43

The rates in the table above are averages for a non-smoker, 20 year term, and $250k in coverage.

When insurance companies are determining how much you should pay, one of the key factors they are trying to determine life expectancy.

Since women are, on average, expected to live longer than men, their life insurance rates are typically lower.

Your age at the time of purchase will also influence your rates; the younger you are, the cheaper it’ll be. A benefit to buying early? You lock in that rate for the entire term.

Average Term Life Insurance Rates By Policy Size

Policy sizePrice (monthly)
$100k$12.76
$250k$17.94
$500k$23.66
$1m$38.61
$2m$69.87

The rates in the table above are based on a 20 year policy for a 30 year old non-smoker in excellent health.

The policy size is the lump sum that gets paid out upon death. In insurance jargon, you may hear this called the’ face value’ or ‘death benefit’. The more coverage that you have the more your policy will cost you.

When it comes to deciding how much coverage you need, a good rule of thumb is 10-15x your pre-tax annual income. The purpose of life insurance is to replace your income/cover the costs of a nanny or childcare if you’re a stay-at-home parent.

“You ought to have 10-12x your income on you. Meaning, if you make $50k a year you should have $500 - $600k of life insurance” – Dave Ramsey.


Why do they say this amount? Lets run through an example:

Caroline earns $50,000 a year. So, she takes out a life insurance policy that is 12x her income – $600,000. If her family invests that $600,000 and makes 8% a year, then they’re creating $48,000 a year. The earnings from the invested lump sum could roughly cover Caroline’s income for her family.

Read our article on how much life insurance you need and use our free life insurance coverage calculator.

Average Term Life Insurance Rates By Policy Length

Policy lengthPrice (monthly)
10 years$13.82
20 years$17.94
30 years$24.07

The rates in the table above are based on a $250k policy size for a 30 year old non-smoker with excellent health.

The number of years (known as the term) that you have life insurance significantly affects the price. The longer the term the higher the price is, as you get older the higher risk you represent to the insurer.

The goal of life insurance is to replace your income. With good financial planning—you’re looking at life insurance, which means you’re financially savvy—you will be “self-insured” by the time your retire. In other words, you will have large enough nest egg (401k, pension, other investments) to live without depending on a job for income.

Therefore, you typically only need to be covered until you retire or your family no longer depend on your income

Average Term Life Insurance Rates By Health

Health statusPrice (monthly)
Excellent$--
Great$--
Average$--

The rates in the table above are based on a $250k policy size for a 30 year old non-smoker.

Your health directly affects your price. During the application process you’ll answer questions about your health and your family’s health.

Insurers are looking for tobacco use, a history of medical conditions, your weight, cholesterol, and blood pressure.

Most insurers will conduct an at-home medical exam, which takes about 20 minutes. Bello partners with insurers that offer instant life insurance without a medical exam. After filling out the application, you’ll learn if you qualify for no-medical or if you are required to take a medical exam in order to get a final decision and price.

When you get a quote with Bello, you’ll be asked how you consider your health (excellent, good, average). This helps provide you an accurate quote but does not affect the actual price you are given. Insurance companies use data to determine your health. if you underestimate your health you’ll see an actual price that’s actually lower than the initial quote.

Final Thoughts

The main factors that affect your life insurance rates are: gender, age, health, policy type, policy term, and policy size.

Term life insurance is much more affordable than most people think. The best time to buy life insurance at the lowest price is now. The younger you are the cheaper the rate you can lock in.

Get a quote with Bello

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Tom Griffiths

Tom is the Founder of Bello and life insurance expert. He built Bello to make life insurance simple to understand and even easier to get.

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