Average Life Insurance Rates in 2021
Buying life insurance is a big decision. There are MANY companies, term lengths, and coverage amounts to choose from. Price will no doubt factor into your decision and may even determine what type of policy you choose. Right now, the average cost of life insurance is about $26/month - but this rate can change dramatically based on the applicant, the issuer, and the policy type.
Factors affecting life insurance rates
Life insurance in 2021 is determined by pretty much the same factors as it was in and before 2020. Life insurance premiums are mainly based on life expectancy, so the healthier you are the cheaper your rates will be. Life expectancy can depend on things that don’t necessarily pop into your mind first thing when you think about life insurance, like your (potentially hazardous) occupation, driving record, credit history, criminal record, and even high-risk hobbies. Ultimately, lots of elements factor into what your life insurance rate could look like this year.
How life insurance rates are calculated
In general, the cost of life insurance is determined by:
1. Health Status.
While most health conditions are unavoidable, smoking and tobacco use are the biggest premium determinant that is within a person’s control. Smokers typically pay higher premiums than nonsmokers. For instance, the 35-year old nonsmoker’s monthly premium rate for a $500,000 20-year term life policy would be around $30, while a 35-year old smoker would pay $76 for the same policy! For this reason, insurance companies classify individuals under categories like Super Preferred (those with the fewest health concerns) and Standard (those more prone to health conditions).
2. Age and Gender.
Premiums are significantly higher later on in life. 30-year term policies for 65-year-olds usually come with a clause, since the insured will be 95 years old at the end of the term which practically guarantees death benefits, as health deteriorates with age and makes the insured more of a risk. Also, men typically pay higher premiums than women. For instance, a 20-year term life policy of $500,000 will cost a 30-year old man around $230 but only $190 for a 30-year-old woman.
3. Length and Type of Policy.
Term life policies are less expensive than whole or permanent life policies because of the term length and the benefits being offered. For instance, the average monthly premium rate of a $250,000, 30-year long term (the longest term option) life insurance policy for a 30 year old would be around $19.69. The average monthly premium for a $250,000 whole life policy for the same person, however, would be $372.17, which illustrates the huge difference in monthly insurance costs solely based on the type of life insurance.
Evidently, there’s much to think about when purchasing life insurance. Based on your age, sex, overall health, and policy type, the amount you pay per month on life insurance could be either affordable or extremely expensive. The best motto for life insurance shopping, however, is: It’s never too early to buy life insurance. In fact, the younger and healthier you are, the more affordable those pesky premiums will be.
To shop quickly and compare life insurance rates with no stress or pressure from insurance salesmen, consider using online tools like iLifeInsurance.net which presents the most affordable and practical life insurance rates within minutes. Plus if you need help choosing the right policy, iLifeInsurance has agents round the clock to help you get the best bang for your buck. So, stop reading this article and start planning for your future today!