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Average Life Insurance Rates for 2022

Average Life Insurance Rates

So you’ve decided it’s time to bite the bullet and get life insurance. Maybe you’ve recently gotten married or had your first child and want to make sure they’re well taken care of. Or maybe you heard that life insurance pays triple on a business trip, and you’re going to be traveling for work again soon.

Whatever your reasons for wanting to find out more about life insurance, read on. We’ve got all the latest life insurance policy pricing information for you so you can know the average life insurance rates for 2022. 

How Much Is Life Insurance?

The average life insurance policy is currently $26 a month. That’s assuming you’re 40 years old, in good health, and you want to buy a 20-year term policy.

But there’s a good chance that you’re not 40, not in great shape, or want something different – like a 250k whole life insurance policy. You should know that the “average” life insurance policy rarely ever applies.

Policies and premiums are calculated based on individual circumstances, and many factors will influence your life insurance rate.

How Life Insurance Rates Are Determined

Life insurance rates are calculated based on complex formulas that take into account your age, gender, health, lifestyle, and various other factors. For instance, life insurance for smokers is more expensive. If you’re generally healthy but you smoke, you would pay more for your premium than someone else who is the same age and in the same general health but is a non-smoker.

You can also choose to buy either term life insurance, which is valid for a fixed number of years, or whole life insurance, which covers your entire lifespan and includes investment components and other benefits. 

Your insurance broker will ask you to provide a ton of information about your age, health, medical history, habits, and more. They will apply all of that information in a reliable life insurance premium calculator to quote you a rate that is specific to you.

What Is the Average Cost of Life Insurance?

To get a general idea of how much your life insurance may cost, you should understand how certain factors affect average life insurance rates.

Average Cost of Life Insurance by Age and Gender

The average cost of life insurance goes up as you age and is usually cheaper for women (all other factors being equal). This is because women tend to live longer than men and take fewer risks. So, they are a lower risk to insurance companies.

For instance, a 30-year-old man in good health applying for a $500,000 policy might be quoted an annual rate of $227, while a woman of the same age and health would only pay $193.

Age is also a major factor when it comes to the cost of life insurance. If you take out a life insurance policy when you’re 30, you probably have about 50 years before you are likely to die. This makes you a lower risk for life insurance companies. Even if they give you a twenty-year term policy, you’re likely to outlive it by thirty years!

But when you get to fifty, you’re a lot closer to the time that you might conceivably pass away, so there’s more risk. This is why the older you are, the more your life insurance policy will cost you per year.

By age fifty, a man in good health may be quoted $842 and a woman $654. 

Average Cost of Life Insurance by Policy Type

Age and gender aren’t the only factors that affect the cost of a life insurance policy. Perhaps the most significant determining factor will be the policy type that you choose.

In fact, for a $500,000 policy, a 30-year-old man would be quoted an average of $227 for a standard term life policy, but $4,015 for a whole life policy. Similarly, a woman at 30 would be looking at $193 for term life and as much as $3,558 for a whole life policy.

Of course, whole life policies have more coverage and benefits. So, there are pros and cons to weigh aside from just the price when comparing term and whole life insurance policies.

You should carefully examine the differences between term and whole life insurance before choosing a policy.

Average Cost of Life Insurance by Health

Life insurance companies know that the better your current health, the longer you are likely to live. They categorize each customer as either “super preferred,” “preferred,” or “standard” based on your health and lifestyle. 

Standard doesn’t necessarily mean you’re in terrible shape, but just that you don’t live the healthiest lifestyle. A super preferred customer, on the other hand, has no negative medical history, is in great shape, and makes mostly healthy choices.

How you are categorized can have a big impact on your life insurance rate. In fact, the same 30-year-old woman getting a 20-year, $500,000 term life policy would pay $193 as a super preferred customer, $233 as a preferred customer, and as much as $354 as a standard customer. That’s a big difference, so it’s worth paying more attention to your health! 

Average Cost of Life Insurance by Term Length

The longer the term of your life insurance, the more likely you are to die within the term. For this reason, life insurance with a longer term will cost more per year.

For instance, a 40-year-old-woman who is a super preferred applicant will pay an average annual rate of $185 for a 10-year term policy. But that rate will go up to $478 for the same customer if they select a 30-year term policy.

Average Cost of Life Insurance by State

As if your age, gender, health, and policy type weren’t enough, life insurance companies will also charge different rates by state. The state rate factors in the average life expectancy in the state, how safe it is to live there, how likely natural disasters are to occur, and many other factors.

While the average annual premium of a household in the U.S. is $993, the average in New Jersey is $1,510, while the average in Washington is only $690 per household.

How to Compare Life Insurance Policies to Find Your Ideal Rate

When you get quotes from life insurance companies, make sure you’re comparing apples with apples.

For instance, make sure both rates are for term life policies. Then make sure the values of the policies are the same. Different policies may not include the same amount of coverage, so make sure you know what is covered and excluded in a particular policy.

If there are huge differences between the quotes you get, go back to the insurers and ask them why that might be. There may be a good reason why you would pay more with one company than another.

Finally, remember that when you’re buying life insurance, the cost of the premium is not the only consideration. You also want to choose a reputable company that you know will still be around if your family ever needs to make a claim. So take a close look at their history, track record, and reviews before you sign on the dotted line!

Featured Image: Twenty20

About the author: Liam McGillivray is a writer and editor at Wealthy Millionaire. He holds a Master's degree in Public History from the University of Victoria and a BA in History and Classical Studies from Queen's University. His interests include fantasy literature, NFT gaming, and film studies.

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