Average Life Insurance Cost 2019 - Elite Personal Finance
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Insurance

Average Life Insurance Cost 2019

EPF Last Update: September 11, 2019

When purchasing life insurance, a variety of factors are used to determine your monthly premium: your age, your height-to-weight ratio, whether or not you smoke and your history of family illness.

See, it’s all about risk.

The higher your mortality probability, the more it costs to obtain coverage.

To get a sense of the average cost of life insurance across the United States, we analyzed quotes for a $500,000 policy from four of the largest issuers: Prudential, MassMutual, John Hancock and Transamerica. We found that life insurance premiums increase as you age and that coverage is more expensive for men than women. Moreover, smokers tend to pay three to four times more for coverage than non-smokers.

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Average Life Insurance Cost 2019: Statistics And Key Findings

  • The average cost of life insurance increases as you age.
  • Men pay more for life insurance than women.
  • Smokers pay more for life insurance than non-smokers.
  • Transamerica is the only insurer in our study that offers a 25-year term to applicants 60 or older. Transamerica is also the only insurer in our study that offers a 30-year term to smokers 50 or older and a 25-year term to smokers 55 or older. None of the insurers in our study offer a 30-year term to applicants 60 or older.
  • For a 30-year-old, the average cost of life insurance ranges from $19.86 per month for a 10-year term to $32.79 per month for a 30-year term. For a 55-year-old, the average cost of life insurance ranges from $76.59 per month for a 10-year term to $225.07 per month for a 30-year term.
  • For a 30-year-old male, the average cost of life insurance ranges from $21.73 per month for a 10-year term to $35.32 per month for a 30-year term. For a 55-year-old male, the average cost of life insurance ranges from $86.25 per month for a 10-year term to $231.67 per month for a 30-year term.
  • For a 30-year-old female, the average cost of life insurance ranges from $17.98 per month for a 10-year term to $30.26 per month for a 30-year term. For a 55-year-old female, the average cost of life insurance ranges from $66.94 per month for a 10-year term to $218.47 per month for a 30-year term.
  • A 30-year-old male smoker pays – on average – 213% more per month for a 10-year policy than a non-smoker. A 60-year-old male smoker pays – on average – 313% more per month for a 10-year policy than a non-smoker.
  • For a 30-year policy, a 30-year-old male smoker pays an average of 267% more per month, while a 45-year-old male smoker pays an average of 300% more per month than a non-smoker.
  • A 30-year-old female smoker pays – on average – 180% more per month for a 10-year policy than a non-smoker. A 60-year-old female smoker pays – on average – 274% more per month for a 10-year policy than a non-smoker.
  • For a 30-year policy, a 30-year-old female smoker pays an average of 217% more per month, while a 45-year-old female smoker pays an average of 244% more per month than a non-smoker.
  • A 30-year-old female smoker pays – on average – 26% less per month for a 10-year policy than a male smoker. And a 60-year old female smoker pays – on average – 33% less per month for a 10-year policy than a male smoker.

Average Life Insurance Cost By Age And Term

Analyzing the table below, you can see that monthly life insurance premiums increase as you age. A 25-year policy purchased at age-40 – on average – costs an additional $20.19 per month versus the same policy purchased at age-30.

Age:10-Year Term:15-Year Term:20-Year Term:25-Year Term:30-Year Term:
30$19.86$22.17$25.83$27.37$32.79
35$20.93$24.54$29.38$35.14$39.28
40$26.28$31.35$40.07$47.56$59.24
45$35.64$43.51$56.86$74.40$89.90
50$52.65$65.64$87.77$114.10$144.80
55$76.59$97.76$135.11$198.09$225.07
60$121.37$158.40$215.22$348.09*N/A

Cost By Age And Terms

* Transamerica is the only insurer in our study that offers a 25-year term to people 60 or older

Because insurers are in the business of buying and selling risk, higher premiums are expected as you age. For applicants 60 or older, a 20-year policy has an average cost of $215.22 per month. Moreover, Transamerica is the only insurer in our study that provides 25 years of coverage to applicants 60 or older.

To that point, none of the insurers in our study offer 30 years of coverage to applicants 60 or older.

Average Life Insurance Cost By Gender

When breaking down the numbers by gender, you can see that life insurance is more expensive for men than women.

And why is that?

Well, for starters, men have a lower life expectancy. According to the U.S. National Center for Health Statistics, men have a life expectancy of 76.1 years, while women have a life expectancy of 81.1 years. And due to the higher likelihood of death, higher premiums are used to compensate for the increased risk.

Men:10-Year Term:15-Year Term:20-Year Term:25-Year Term:30-Year Term:
30$21.73$24.46$28.61$30.07$35.32
35$22.90$26.74$31.73$37.84$40.79
40$28.94$33.83$42.89$54.27$64.80
45$38.56$47.08$61.26$82.63$100.10
50$56.78$71.32$95.76$125.27$162.63
55$86.25$111.16$152.36$228.51$231.67
60$139.57$182.03$244.14$389.58*N/A

Cost By Gender

Men also tend to work in dangerous occupations.

Whether it’s as police officers, firefighters, construction workers or miners, mortality risk is higher than comparable white-collar positions. And while women have increased their footprint in these fields over the last several years, men still make up the overwhelming majority.

Women:10-Year Term:15-Year Term:20-Year Term:25-Year Term:30-Year Term:
30$17.98$19.89$23.05$24.67$30.26
35$18.95$22.34$27.02$32.44$37.76
40$23.62$28.88$37.26$40.84$53.67
45$32.73$39.95$52.46$66.18$79.70
50$48.52$59.95$79.77$102.94$126.97
55$66.94$84.36$117.87$167.66$218.47
60$103.18$134.78$186.30$306.59*N/A

Cost By Gender

Average Life Insurance Cost For Smokers

When it comes to life insurance, smoking is a costly habit.

A 30-year-old male smoker pays – on average – 213% more per month for a 10-year policy than a non-smoker. And for a 30-year policy, a 30-year-old male smoker pays an average of 267% more per month..

The variance also increases with age.

A 60-year-old male smoker pays – on average – 313% more per month for a 10-year policy than a non-smoker, while a 45-year-old male smoker pays an average of 300% more per month than a non-smoker.

Men:10-Year Term:15-Year Term:20-Year Term:25-Year Term:30-Year Term:
30$67.94$73.07$84.72$106.23$129.60
35$72.82$86.12$110.28$135.90$162.74
40$103.01$127.05$165.68$203.42$251.97
45$159.08$200.42$265.94$331.46$401.12
50$242.27$308.93$396.21$487.54$529.76*
55$368.15$485.94$614.14$721.54*N/A
60$575.99$746.23$833.65$1,071,56*N/A

Cost By Gender

* Transamerica is the only insurer in our study that offers a 30-year term to smokers 50 or older. It’s also the only insurer in our study that offers a 25-year term to smokers 55 or older.

Similar to the gender data above, women smokers also pay less for life insurance than their male counterparts.

A 30-year-old female smoker pays – on average – 26% less per month for a 10-year policy than a male smoker. And a 60-year old female smoker pays – on average – 33% less per month for a 10-year policy than a male smoker.

As an apples-to-apples comparison, a 30-year-old female smoker pays – on average – 180% more per month for a 10-year policy than a non-smoker. And for a 30-year policy, a 30-year-old female smoker pays an average of 217% more per month than a non-smoker.

Likewise, age also plays a role.

A 60-year-old female smoker pays – on average – 274% more per month for a 10-year policy than a non-smoker, while a 45-year-old female smoker pays an average of 244% more per month for a 30-year policy than a non-smoker.

Women:10-Year Term:15-Year Term:20-Year Term:25-Year Term:30-Year Term:
30$50.29$57.45$71.89$75.73$95.87
35$55.98$67.36$89.61$101.70$118.74
40$78.54$98.66$126.64$150.40$176.80
45$121.10$155.11$189.62$232.19$274.39
50$184.35$234.74$283.79$360.89$368.51*
55$269.53$336.44$417.89$493.64*N/A
60$385.68$486.63$600.39$805.82*N/A

Cost By Gender

Average Life Insurance Cost By State

Unlike other financial products, your state of residence doesn’t influence the cost of your life insurance policy. When analyzing quotes from our four insurers, changing states from California to Delaware or Ohio to Connecticut didn’t affect quoted premiums.

Facts About The U.S. Life Insurance Market

The American Council of Life Insurers’ Fact Book offers statistics and insights into the U.S. life insurance industry. It covers areas such as assets, liabilities, income, expenditures, reinsurance, life insurance and annuities.

Its 2018 study found:

  • The U.S. life insurance industry has 781 companies in operation as of 2017. 767 are domiciled in the U.S., while 14 are domiciled in U.S. territories.
  • Texas (102), New York (86), Illinois (50) and Ohio (39) have the most life insurance companies operating in their state.
  • Americans purchased $3.1 trillion in new life insurance coverage in 2017 – a 5.2% increase from 2016. Individual life insurance is the most popular, accounting for 58% of all policies as of year-end 2017. As well, 40% of new individual life insurance policies purchased in 2017 were term policies.
  • California residents purchased $222 billion worth of new life insurance policies in 2017. Texas residents purchased $140 billion, New York residents $136 billion and Florida residents $103 billion.
  • Total life insurance coverage in the U.S. is $20.4 trillion as of year-end 2017 – a 0.5% increase from 2016.
  • At the end of 2017, policy reserves – which are funds set aside by U.S. insurers to pay future claims – totaled $5.5 trillion. Life insurance reserves accounted for 28% of total policy reserves. In contrast, in 1980, life insurance reserves accounted for 51% of total reserves.
  • In 2017, life insurers paid $77 billion to beneficiaries – a 1.3% increase from 2016. Individual life insurance policies accounted for $55 billion, or 71 percent of the total. $551 million in new claims and $616 million in other claims were in dispute in 2017. $248 million was paid out, while $355 million remained contested. The rest remained pending.
  • U.S. life insurers own $7.183 trillion in assets – with $3.48 trillion invested in bonds, $2.26 trillion in stocks, $513.55 billion in mortgages, $42.72 billion in real estate, $136.54 billion in policy loans and $749.28 billion in other assets.
  • Prudential is the largest life insurer in the U.S. with $595.55 billion in assets as of 2017.
  • Since 2000, total assets owned by U.S. life insurers have grown by 126%.
  • Canada ($387 billion), the United Kingdom ($246 billion), Netherlands ($218 billion) and France ($202 billion) own the most foreign-controlled assets of U.S. life insurers.
  • The age-adjusted death rate – per 1,000 people – has fallen from 17.9 in 1940 to 7.3 in 2016. The death rate among men has fallen from 19.8 to 8.6, while the death rate among women has fallen from 16 to 6.2.
  • Life expectancy at age-25 is 52.4 years for men and 56.9 years for women. Men who retire in 2016 at age-65 are expected to live an average of 18 more years, while women who retire in 2016 at age-65 are expected to live an average of 20.6 more years.

How We Conducted The Study

To provide the most accurate depiction of the average cost of life insurance across the United States, we analyzed quotes from four of the largest issuers: Prudential, MassMutual, John Hancock and Transamerica.

First, we calculated the average cost across all applicants. The tables above tally monthly premiums for a $500,000 life insurance policy for residents of California. Policy holders are assumed to be in excellent health and have a clean driving record. We organized our findings by age and term to detail how premiums change based on age and duration.

Next, we broke down the average cost of life insurance by gender. For men, we assumed a height-to-weight ratio of 5’10, 175 pounds. For women, we assumed 5’4, 110 pounds.

Last, we calculated the average cost of life insurance for smokers. We used the same inputs as above, while assuming recreational use of tobacco.

Sources:

MassMutual

John Hancock

Transamerica

Prudential

 

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