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How Much Does Life Insurance Cost? How Rates are Calculated

Life insurance can protect your loved ones should the worst occur – but you already knew that. What you really need to know is how much will the financial safety net cost?

With dozens of insurance companies and a range of options for term length and coverage amount – and the many factors insurers consider when pricing a policy -- this is no easy question to answer. But, the following guide to life insurance costs will help you understand what to expect and how to find an affordable rate.  

Average Life Insurance Costs

What do other people typically pay for life insurance? NerdWallet, a trusted online financial resource, compared the policy prices for women and men at various ages. 

According to their data, for instance, a 30-year-old woman can expect to pay an average of $208 per year for a $500,000 policy with a 20-year term. For a whole life policy in the same amount, the average yearly cost is $4,142.

For a 30-year-old man, that same 20-year term life policy in the amount of $500,000 costs $242 per year. With a whole life policy, the yearly price jumps to $4,675.

Factors that Affect Life Insurance Costs

Let’s dive into those statistics a bit and talk about what goes into determining the price of a policy. 


Generally speaking, the older you are, the higher your policy premiums. The likelihood that the insurer will have to pay out increases with age, so younger people usually enjoy lower premiums.


Life expectancy plays a role as well. Because women tend to live longer than men, they typically pay lower insurance rates.


Pre-existing medical conditions and a family history of cancer, stroke and other serious, life-threatening issues often drive up the cost of insurance. The same goes for lifestyle choices that pose a health risk, such as smoking.

Age, gender and health have the biggest impact on policy premiums, but insurers consider several other factors as well. For example, your occupation, driving record and hobbies could all result in higher rates.

How to Find Affordable Life Insurance

Like everyone, you want an insurance policy that provides the right amount of coverage at the right price. To make your premiums more affordable, experts suggest:

  • Locking in rates when you’re young
  • Carefully determine the amount of coverage you really need
  • Investing in the type of policy – term life, convertible term life or whole life – that makes sense for your family situation
  • Working with an independent insurance agent to compare rates and options from numerous companies

You can also consider employing the ladder strategy. With this approach, you’ll purchase several policies with varying term lengths and coverage amounts. As time passes and your insurance needs decrease, some will expire – so you’ll end up paying less and less for coverage.

Are you ready to shop for life insurance? Let the independent agents at Four Seasons Insurance Agency help you find the protection you need at a price you can afford. A family-owned independent insurance agency serving the greater Salt Lake City area, Four Seasons Insurance has been helping northern Utah residents obtain affordable coverage for decades. For more information, or to explore your life insurance options, contact our Sandy or Taylorsville office today.

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