Life Insurance Rates by Age Explained
Posted by Frank Gogol in Insurance | Updated on May 30, 2023
Life insurance is one of the simplest ways to provide for the people you care about if the worst happens to you. However, it is not always clear when the right time is to get it, and how much it can cost. This article will give you an idea of how life insurance premiums change based on various factors, including your age.
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Average Life Insurance Rates by Age
An insurance premium is what you pay to have an insurance policy. Insurance premiums vary based on various factors.
One factor that increases the cost of insurance premiums is risk. The higher the risk of a bad event happening, the more an insurance company will charge to insure against it. When it comes to life insurance, age is a major risk factor.
For example, the cost of a life insurance policy when you are 30 is, on average, only 6% higher than when you are 25. However, the difference in premium between the ages of 60 and 65 is about 86%. In the section below, a life insurance rates by age chart illustrates this concept in more detail.
How Your Age Impacts Your Life Insurance Premium
To better illustrate the connection between age and life insurance cost, the life insurance rates by age chart below shows typical premiums for people of various ages, for a 20-year policy with a $500,000 death benefit.
| Age (Years) | Average Premium |
| 25 | $31 |
| 30 | $33 |
| 35 | $38 |
| 40 | $50 |
| 45 | $78 |
| 50 | $118 |
| 55 | $190 |
| 60 | $318 |
| 65 | $593 |
Please note that the life insurance rates by age chart above is for illustrative purposes only. The actual premium an insurance company will charge you depends on numerous factors, including the term (how long the policy lasts), death benefit (how much it pays out), and your specific risk profile (your lifestyle, job, health, etc.).
Why You Should Get Life Insurance in your 20s and 30s
Unlike many other insurance products, your life insurance is not for your benefit. It is so the beneficiaries of the policy have financial support in the event of your death.
From this definition, it should be clear that if there are people in your life who are financially dependent on you, it makes sense for you to have a life insurance policy.
This is because anyone financially dependent on you at present will immediately become financially vulnerable in the event of your death. This is true regardless of your age.
If you know that life insurance makes sense for the people you care about, then the most cost-effective strategy is to get a policy early. This is because the premium will be lower the younger you are when the coverage begins, even for the same death benefit.
This means that if you are in your 20s or 30s, either married, with a family to support or with anyone depending on you, it makes sense to get life insurance while the cost of getting it is as low as it will ever be.
How Much Does Life Insurance Cost?
Unlike many other products in the world, the cost of life insurance varies from person to person. A life insurance company takes into account several details about you to calculate the probability of your death during the policy period, and thus how much your policy will cost.
Among the factors an insurer considers to calculate your risk profile are:
- your age
- your gender
- whether you are a smoker
- your overall physical health
- whether you have a dangerous job
- whether you have high-risk hobbies or behaviors
- your family history.
Each of these factors has a different effect on your premium. For example, smokers pay, on average 218% more for life insurance than non-smokers with a similar profile.
Besides these biographical details, your premium is also determined by the type of insurance product you want. There are many different kinds of life insurance policies, which are differentiated based on the following categories:
- Death benefit: This is the amount of money that the insurance company is expected to pay to the beneficiaries of your policy in the event of your death.
- Term: This is how long the policy lasts. Typically, a policy will have a 10-year term, a 20-year term, or be permanent.
- 10-year term: These tend to be the least expensive option, especially for younger people.
- 20-year term: This is the most popular life insurance type in the U.S. and is often recommended for young families with a significant debt or expense (e.g. mortgage, school) that the death benefit could prevent from causing financial ruin.
- Permanent: This type of policy is continually renewed until your death, usually with periodic adjustments in your premium. As with all other life insurance, it is generally much cheaper the earlier you get it.
Life Insurance FAQ
The questions answered below often come up when people see life insurance rates by age chart.
At what age should I get life insurance?
The point of life insurance is to take care of financially dependent people left behind if you die. That means you should get life insurance at whatever age you are when people begin relying on you for their financial welfare. The younger you are when you get life insurance, the less expensive it is.
Is buying life insurance worth it?
Essentially, the answer to this question depends on your social and family situation. If you do not have anyone reliant on you to support them, then they probably won’t need financial support in the event of your death. In that situation, life insurance probably wouldn’t be worth it.
However, if you are a significant income contributor in your household, the answer is almost always yes.
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Final Thoughts
A life insurance rates by age chart gives you a lot of information but it is not the whole story. Life insurance is cheaper the younger you are because there is a much lower probability of death on average for young people than older people. However, age is not the only risk factor. Other things such as your health, habits, and the type of policy you choose can have a big impact on the monthly cost of life insurance. If you have people who rely on you financially, life insurance is a good way to protect their income in the event of your death.
