Life insurance costs can be all over the board. So the short answer to the question of how much you can expect to pay for life insurance is “it depends”.
Some of the things it depends on include things like:
- Age
- The type of policy
- How much the policy will pay out
- And more!
While how much a policy will cost you varies a lot, below we’ll look at the average costs of some of the most common types of life insurance policies. That data below is helpful in giving you a general idea of what each type of life insurance policy should cost you, on average.
Average Term Life Insurance Costs
We’ll start with the most common type of life insurance policy people get. Term life insurance. Term life insurance also happens to be the least expensive type of life insurance policy that you can buy. For the average costs below, we’ll look at a 20 year policy with a pay out of $500,000.
You can get a term life insurance plan for as little as $25 a month or so if you are a healthy, non smoker. If you wait to get the same policy until you reach 65 years of age, the policy will average around $475 a month! And that’s if you’re healthy. If you are 65 and you smoke, the average cost of your premium will be around $1650 a month!
Average Whole Life Insurance Costs
While not as popular as term life insurance, a lot of people go with whole life insurance policies. The costs of whole life policies are definitely higher than term policies. But the additional cost may be very worth it depending on the needs of you and your family.
If you’re looking at a $500,000 whole life policy when you’re 25 years old, the average premium costs around $330 a month. For a 65 year old, a whole life policy will cost around $2000 a month for that same $500,000 coverage.
Average Universal Life Insurance Costs
Interested in a Universal Life Insurance policy? Cost-wise they tend to be somewhere between term and whole life policies (but much closer to whole life).
A $500,000 universal life policy for a 25 year old costs around $250 a month on average. For a 65 year old, a $500,000 universal life policy will average around $1500 a month.
Best Advice For Buying Life Insurance: Shop Around!
As we said at the beginning of this article, the costs of life insurance policies vary widely. And as you can see, the type of policy will play a BIG factor in how much you end up paying for a life insurance policy.
However, another very big factor to consider is the life insurance company you end up buying from. The rates above for each policy are averages. But there can be a big difference in rates for the same policy between one company and another. So it pays to shop around. Just remember, though, that the cheapest policy may not be the best policy. Take into account the reputation of the life insurance company you’re looking at. And, also, look at the fine print and understand the specific details of each policy/company you’re considering. By knowing these things, you can better decide whether it makes sense to pay a little extra for a policy that better meets the needs of you and your family.
