How Much Does Term Life Cost?
Term life insurance is the most affordable way to buy coverage. Because it has an expiration date and no cash value, the premiums are significantly lower than permanent insurance.
Key Factors That Affect Your Rate
Insurance underwriters look at "mortality risk." The higher the risk of you dying during the term, the higher the price. Your specific Policy Type also impacts the cost.
- 1. Age: Rates increase roughly 8 percent to 10 percent every year you wait. Buying in your 30s is drastically cheaper than in your 40s.
- 2. Health Class: Insurers categorize you. "Preferred Plus" gets the best rates. High BMI, blood pressure, or cholesterol drops you to "Standard," costing 25 percent to 50 percent more.
- 3. Smoking: This is the biggest factor. Smokers typically pay 200% to 300% more than non-smokers.
- 4. Term Length: A 30-year policy costs more than a 10-year policy because the insurer is on the hook for a longer, riskier period of your life.
Sample Monthly Rates ($500,000 Coverage)
| Age | Male (Non-Smoker) | Female (Non-Smoker) | Male (Smoker) |
|---|---|---|---|
| 30 | ~$26 / mo | ~$22 / mo | ~$85 / mo |
| 40 | ~$42 / mo | ~$36 / mo | ~$145 / mo |
| 50 | ~$110 / mo | ~$88 / mo | ~$360 / mo |
*Estimates only for a 20-year term. Actual rates depend on full underwriting.
๐ก Pro Tip: "Laddering" for Savings
If a $1 Million policy is too expensive, consider buying two smaller policies: a $500k policy for 30 years and a $500k policy for 15 years. This covers you heavily while kids are young/mortgage is high, and drops cost when financial obligations decrease.