Besides the type of life insurance you select, age and gender affect the cost of life insurance the most.
Buying Younger Means Paying Less for a $100,000 Life Insurance Policy
Age is a key rating factor for life insurance companies. The longer you delay buying a policy, the higher the rates will go. This is because your life expectancy is declining as you age, which means the risk for the insurance company increases. To lock in cheaper rates, buy coverage when you’re younger if possible.
Our analysis shows the savings you can enjoy if you buy a $100,000 life insurance policy in your 30s. If you put off buying a 20-year term policy until your 50s or 60s, you’ll end up paying much more:
- Waiting from age 30 to 40 to buy a 20-year term $100,000 policy causes the average monthly cost to jump by 22% for males and 13% for females.
- Waiting until age 50 to buy that same policy, the average monthly price increases 133% for males and 113% for females compared to the rates for a 30-year old.
- Waiting until age 60 to buy results in an average monthly rate hike of 489% for males and 375% for females compared to if you bought the policy when you were 30.
How Gender Affects the Cost of $100,000 Life Insurance
Gender is another main factor used to calculate life insurance costs. Females generally live longer, so they typically get better rates.
Our analysis shows that you don’t start paying more for $100,000 life insurance policies until you reach your 40s and that accelerates in your 50s and 60s, depending on the term length. The quotes for males increase more than females as they get older. Quotes are also higher for males for longer lengths of term life insurance, compared to females.
For example, let’s take a look at how gender affects monthly rates for a 20-year, $100,000 term life policy:
- At age 30, the rates are nearly identical for both genders with men paying only $1 more a month on average.
- At age 40, males pay 22% more per month than females. That’s $2 a month or $24 a year.
- At age 50, males pay 24% more per month than females, which is $4 more a month or $48 a year on average more for men.
- At age 60, males pay 39% more per month than females, which is a difference of $15 a month or $180 per year on average.
