Term life insurance is one of the most popular forms of insurance because, frankly, it’s the most affordable. It works by insuring a policyholder for a specific amount of time, like 20 years. However, it’s not the same price for everyone. Based on a variety of factors, like your age and overall health, you’ll get a rate that may be different from another person’s. However, you may be surprised with how affordable it is; sometimes people pay as little as a few dollars a month.
Factors to Consider
There are many factors that determine what your term life insurance will cost. In fact, there are some instances where a person may not be insurable at all because it’s too much of a risk for the life insurance company. For example, if your occupation involves hazardous conditions or if your hobbies are dangerous, then you may have to pay a higher rate than someone else who simply goes to an office and collects rocks as their hobby.
Age also comes into play. A healthy 30-year-old will likely pay less for the same policy as a healthy 40-year-old because — as morbid as this may sound — there’s less of a chance that the company will have to pay out the benefit on the 30-year-old than the 40-year-old. Additionally, the length of your term will factor into how much you’ll have to pay.
Where you live can also be a deciding factor since that can affect your overall health, too. The best thing to do is to get a few quotes and choose the one that offers something you can afford with the coverage you need.
Term Life Insurance Costs In Your 30s
Let’s look at a few quotes for a healthy, nonsmoking male and female in their 30s:
According to Policy Genius, for a healthy 35-year-old average female living in a city, a $1,000,000, 20-year term policy would cost about $30-33 a month. This would be bumped up about $5 more for a male. However, you may not need $1 million in coverage if you’re only supporting yourself. So, keep in mind that these life insurance costs could be cut in half if you don’t need as much coverage.
Related: How to Invest In Your 30’s
Term Life Insurance Costs In your 40s
This is where you’ll really see the difference between how much it costs to get life insurance only 10 years later in life, when you’re still at a relatively young age.
A healthy, nonsmoking 45-year-old male of average height and weight, living in a city can expect to pay around $90-95 a month. A female of the same age and overall health will pay $70-72 a month.
If you do the math, this means that for a 35-year-old female, it will come out to around $7,920 over the entire term. However, for a 45-year-old female, over the same term it will cost $17,280.
Related: How to Invest In Your 40’s
Term Life Insurance Costs In your 50s
If you’ve waited until you’re in your 50s to get life insurance, you may be feeling the pangs of regret. Using the same parameters as the previous examples, a 55-year-old male will pay $232-238 a month, and a female of the same age will pay $167-172 per month.
Now, here’s where you need to consider the caveat of term insurance: if you got your insurance policy when you were 35, it would be expired when you’re 55, and you’ll have to pay the new rate. That’s why people may choose a longer term, or opt for whole life insurance instead of term.
Related: How to Invest In Your 50’s
- Remember term insurance only covers you for the term indicated. If it’s a 20-year term, then you’ll need another policy when that’s up, and you don’t get any of your money back.
- Check with your employer to see if life insurance is part of your benefits package. If so, you may only end up paying pennies on the dollar compared to rates when you pay for everything yourself.