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Life Insurance Cost Estimator: How Much Will You Have to Pay? 

Life Insurance Cost Estimator: How Much Will You Have to Pay?
Concept of insurance

As of 2019, almost half of US consumers either don’t have a life insurance policy or don’t know if they have one.

Another study found that the same percentage of people don’t have enough insurance. They lack too much of it, though, as the average gap in coverage was at least $200,000.

This doesn’t mean that you should go for the biggest, most expensive policy, though. “Overinsuring” yourself could deal a huge blow to your finances. This may even make you miss payment deadlines.

That said, it’s best that you know what a life insurance cost estimator is. This way, you’ll have a clearer idea of what goes into life insurance rates and how much you can expect to pay.

Ready to stop guesstimating your potential life insurance premiums? Then let’s dive right into it!

Using a Life Insurance Cost Estimator for More Accurate Figures

A life insurance cost estimator is like a calculator that factors in key variables. These include your age, your gender if you’re a smoker, and the amount of coverage you want to buy. You can also input the number of years you want the policy for,

The tool will then calculate your estimated rates based on these factors. Some may even provide you a list of available offers from various insurers. Using such a tool is the best way to get a more accurate figure of your potential life insurance rates.

Why Your Age and Current Health Matter A Lot

Investment experts say that right after birth is the best time to get a life insurance policy.


For the most part, this is due to insurers charging life insurance rates by age and health. The younger a person is, the lower their insurance premiums usually are.

Here’s a deeper look at the link between one’s age, health, and life insurance rates.

Old Age Raises the Likelihood of Insurers Having to Release Benefits Sooner

As grim as it may sound, one of the main factors that affect the cost of life insurance is the probability of death. The closer one gets to reaching their “life expectancy”, the higher this probability is. In the US, the average life expectancy is 78 years.

Now, keep in mind that life insurance companies pay out benefits upon a policy holder’s death. Since being older means being closer to this event, insurers would make the payout “sooner”. This is why the older you get, the higher your insurance premiums would be.

Younger People Are Less Likely to Make a Claim Soon

Conversely, younger people are usually healthier than those older than them. After all, many chronic health conditions come or worsen with age. These include heart disease, diabetes, stroke, cancer, and obstructive pulmonary disease.

These diseases, unfortunately, are the reason for over 1.7 million fatalities in the US each year. To insurers, younger people still have a lower likelihood of getting such diseases.

This also means that they’ll be able to hold on to their policies longer. This equates to more premium payments, so in exchange, they get charged lower rates.

All these are top reasons younger people often pay less for life insurance.

Other Factors That Go Into Life Insurance Rates

Aside from age and health, here are the other factors that affect the average life insurance cost.

Your Lifestyle

In particular, whether you smoke, drink alcohol, or play extreme sports. Having a “dangerous” job, such as in construction or medical, is also a lifestyle risk. You can expect to pay a higher monthly insurance premium if you do any or all of these.

Family Medical History

Health conditions like heart disease, hypertension, and diabetes can “run in the family”. This means that if someone in your family has any of these, you’re at a higher risk. Some people, for instance, have a predisposition to diabetes due to family genes.

Life insurance providers will take into account your health “predispositions”. If you’re at risk of developing these health problems, you’re likely to pay more for your policy.


US women, on average, live about four to five years longer than men. This may have to do with men’s tendency to take more serious risks and more dangerous jobs. Males are also likelier to avoid seeing a doctor, even if they no longer “feel right”.

Speaking of risks, men also had twice the drug overdose rate of women in 2017. They also have a higher vehicle accident rate than females.

All these contribute to men generally having higher insurance premiums than women.

The Term and Specific Type of Life Insurance Also Impact Cost

Life insurance policies can either be “term life” or “whole life”. Term life insurance costs less, as these have an “expiration” date. For example, a 20-year term life policy will expire (and stop providing coverage) after 20 years.

Whole life, on the other hand, provides coverage for life. It won’t expire, so long as the insured keeps paying the premiums. Most whole life policies also have a fixed premium, so they won’t change, regardless of how old you get to be.

However, this non-expiring feature also makes whole life more expensive. If the policy has a cash value proponent (usually a savings account), then the rates would go up even more. This could be a good investment plan, though, as you can use the savings you accumulate over the life of your policy.

Here’s a site where you can learn the advantage of whole life over term life.

A Rough Estimate

With so many factors that go into life insurance rates, guesstimating is out of the question. Just to give you an idea, a 35-year-old male can expect to pay $35 a month for a fixed 20-year term policy with a $500,000 face value. This can go up to $108 a month, or $1,300 a year if bought by a 50-year-old man in generally good health.

As for women, studies have found that, on average, they pay about a third less than men for life insurance.

Start Shopping for a Quality Life Insurance Policy Now

There you have it, your ultimate guide on what a life insurance cost estimator is, and how it can help. What’s important is to use one as soon as possible, so that you can find your best policy options. The sooner you find these, the sooner you can buy a policy.

This, in turn, can help you secure lower life insurance rates, seeing as your age matters a lot.

Ready for more life pro tips to get your finances in order? Then be sure to head over to this site’s Money section for more guides like this!

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