How Much is Life Insurance?

Written by Carrie Skogsberg

Reviewed by Kevin Draeger, CFP®, ChFC®, Life Product Manager 

Life insurance provides protection for the people you love if you pass away. It’s a vital part of protecting their financial future - it could mean they’ll have enough money to pay off a mortgage, pay for a child’s education or ensure a comfortable retirement if you’re not there to provide an income. Even though many of us know we need life insurance, we hesitate to purchase a policy, and one of the leading causes for this hesitation is the perceived cost.

How much does life insurance cost?

According to the 2023 LIMRA Life Insurance Barometer Study, more than half of the population thinks term life insurance is three or more times more expensive than it is. “Life insurance is complicated, and because the price varies by the individual, it’s no wonder that many assume it costs more than it actually does,” said Kevin Draeger, Life Product Manager at COUNTRY Financial.

So how much does life insurance cost? The truth is, it depends on many factors, which we will get into below. The good news is that even though the factors influencing your rate may feel extensive, getting life insurance has never been easier. Life insurance companies like COUNTRY are utilizing advanced underwriting methods to make the process much simpler for applicants.

What factors into the cost of life insurance?

Life insurance policies are priced using several factors, some you can control, and some you can’t.

• Age – Your age is a significant determinant. Typically, younger individuals pay lower premiums as they are generally in better health. “I always say, life insurance will never be more affordable than it is today,” said Draeger.
• Health history – This includes overall health and medical history, including pre-existing conditions, chronic illnesses, and family medical history.
• Lifestyle habits – Lifestyle habits that are seen as riskier, like smoking, alcohol consumption, driving record and recreational activities, like skydiving and scuba diving, can affect your rate.
• Sex – Generally, women live longer than men.
• Coverage amount – Higher coverage amounts mean higher premium costs.
• Term length – Shorter terms can mean lower premiums.
• Medical exams: The results of a medical exam can impact your rate. However, not all life insurance policies require an exam.
• Additional riders and coverages: Adding riders or extra coverage option can impact your premium.
• Payment frequency: How you choose to pay – monthly, annually, or otherwise – can impact your premium.
• Insurance type – There are a few different types of life insurance, the most popular are term life insurance and whole life insurance, which offer unique benefits and are priced differently. Review life insurance options.

How to lower your life insurance cost

There are a variety of life insurance options that can fit your needs and budget. But if you want to try to lower your rate, taking these steps may help:

1. Purchase a policy at the youngest age possible. “Young, healthy people are probably not thinking about getting life insurance, but that is precisely the time to get it,” said Draeger. “And even if you feel like you waited too long or aren’t as healthy as you used to be, talk with an experienced insurance agent about your options.” Parents may consider purchasing a policy for children as their premiums are typically much lower than an adult’s.
2. Live a healthy lifestyle. Individuals who live healthy lifestyles generally have lower premiums than those who don’t, as they tend to live longer and have a better quality of life.
3. Review your insurance options. Term life insurance is typically less expensive – it’s like renting a policy for an amount of time, and whole life insurance is like buying a policy. Talk with your insurance agent to see which one is right for your needs.

Estimate your life insurance coverage needs

Try our life insurance calculator to estimate your coverage needs, and then talk to an insurance agent about which type is right for you.

Updated 9-14-23