Did you know that most people who think whole life insurance rates are too high overestimate the true price of it by at least twice?
And it’s not without reason. Life insurance companies don’t report premium data because of the policyholders’ privacy, so it’s challenging to calculate how much your life insurance rates will be.
On top of that, there are many factors that affect the price of whole life insurance, which makes prediction even more complex. But here we come into play.
We will show you the average life insurance cost by age and walk you through each factor that shapes insurance rates. After reading this article, you will have an accurate understanding of how much whole life insurance costs and what to expect from your premiums.
Factors that Affect Life Insurance Cost
One of the most important factors that affect the cost of life insurance is the type of policy. In this article, we will cover only whole life insurance rates, but it’s important to mention other types as well.
Whole life insurance is permanent life insurance, and it provides lifelong coverage.
On the other hand, term life insurance offers only a pre-set coverage period. A term life insurance policy typically has lower rates but fewer benefits.
In our previous article, we covered how much term life insurance rates vary by age, so you can check that one out too and compare.
Let’s look at what other factors influence your monthly premiums.
Age
You’ve probably heard that it’s better to purchase life insurance earlier in life. This is because life insurance companies are more likely to give you better rates when they expect you to live longer. However, this doesn’t mean your age should keep you from applying for life insurance. You will see later in this article how much of a premium difference there is between people at different points in their lives.
Simply put, as we get older, we are more likely to die soon and cash out the death benefit. This might seem harsh, but insurance agencies have to weigh in on these factors to ensure they run a sustainable business.
For example, between the ages of 25 and 30, the typical life insurance price only rises by 6%, but between the ages of 60 and 65, the average increase in life insurance quotes is 86%.
Unlike term life insurance, with a whole life insurance policy, your premiums will remain the same throughout your life. So, your age is a factor only when you’re buying life insurance.
Gender
According to studies, in the U.S., the average lifespan is about five years longer for women than men. This is something the life insurance company takes into account and usually sets higher life insurance rates for men than for women.
Of course, gender isn’t the only factor that affects rates, but if an insurance company has two candidates—men and women—with the same age and health status, the women will more likely have cheaper monthly premiums.
State of Health
A state of health is the most important factor in determining the cost of life insurance rates. People with chronic or terminal illnesses have a higher mortality risk and, therefore, higher insurance rates than people of the same age but without health issues.
The insurance company will look at any pre-existing conditions and the results of a medical exam, which may include your weight, blood pressure, and cholesterol levels.
Don’t be surprised if, when buying life insurance, your insurance company asks for your family’s medical history. Most companies look into the family medical history to look for indicators of severe health conditions such as cancer, heart disease, or diabetes.
If you have some health problems, don’t worry; it’s still possible to have life insurance.
Usually, people with health issues consider life insurance policies without a medical exam. Due to their limited benefits, these life insurance policies should only be looked at as a last resort if you can’t get any other kind of life insurance.
Coverage Amount
When getting a policy, one of the crucial decisions you must make is how much coverage you want. This decision will affect your cost of life insurance—higher coverage will cost more because the life insurance company agrees to pay out a larger amount of money when you die.
How much life insurance you will get depends on the specific financial obligations you want to cover (like final expenses, a mortgage, college tuition, etc.). Also, multiplying your salary by ten is a common rule of thumb for calculating the amount of life coverage.
Other Factors
We’ve covered the most important factors that affect whole life insurance rates, but there are more:
- Your job – People in risky job positions (like piloting, law enforcement, police officers, fire workers, and others) have a greater mortality risk than other professions and they will probably pay more for insurance coverage.
- Your hobbies and lifestyle – People who enjoy high-risk hobbies like bungee jumping, car or motorcycle racing, rock climbing, skydiving, and others, will have higher premiums. This also applies to people who have alcohol or drug abuse.
- Your criminal history – Previous arrests or other criminal convictions (including driving record) may affect your rate or disqualify you from coverage with some life insurance companies.
Now that you know what factors influence whole life insurance rates, it’s time to see the life insurance rates chart by age.
Average Rates of Whole Life by Age
Before we jump on the charts, here is a disclaimer you should be aware of: rates vary. The following charts are not a guarantee that your insurance company will make you the same deal; this is just for educational purposes.
Another note: these charts are strictly based on traditional whole life insurance policies. If you’re interested in the maximum-cash value policy, stay with us till the end, and we will give you a rule of thumb you can use.
Whole life insurance premiums for each age group are shown in the charts below.
40-49 Whole Life Insurance Rates Chart By Age
50-59 Whole Life Insurance Rates Chart By Age
60-69 Whole Life Insurance Rates Chart By Age
70-79 Whole Life Insurance Rates Chart By Age
80-89 Whole Life Insurance Rates Chart By Age
Yearly Average Life Insurance Rates For a $250,000 Whole Life Policy
Is Whole Life Insurance Worth It?
Did you think it was more expensive to have a whole life policy than it actually is?
According to the research, more than 50% of people overestimate the cost of life insurance by 300%. But in reality, it is a reasonable price, especially when you consider what you can further do with the benefits.
Benefits of Whole Life Insurance
If you’re not familiar with the benefits of whole life insurance, here’s everything what you should know.
- Lifelong insurance coverage. With whole life insurance policies, you will have life insurance coverage your entire life. You only need to pay your monthly premiums regularly and your policy will be in force. In contrast, a term life insurance policy only lasts for a specific period of time (usually between 10 and 30 years).
- Premiums remain the same. Even though term life insurance rates are a little bit more affordable, there is no guarantee your premiums will be the same. But when you purchase whole life insurance, your initial premiums never increase. Your rates will typically be lower for the rest of your life if you buy a whole life insurance policy when you are younger and healthier.
- The death benefit is guaranteed. With whole life insurance, your policy is guaranteed to pay out at least the face value.
- A whole life insurance policy has a savings component called cash value. The cash value makes the biggest difference between term life insurance and whole life.
- Many tax benefits. Whole life insurance policies offer various tax advantages: tax-free death benefit, tax-deferred growth, tax-favorable access to the cash value through withdrawals, tax-favorable access to policy loans, and you can even pay taxes through your policy!
A whole life policy can accumulate cash value over time, and you, as the policyholder, can access that money whenever you need to. On top of that, the cash value growth is guaranteed at a predetermined rate.
| Benefits of Whole Life Insurance |
| Lifelong insurance coverage |
| Premiums stay the same |
| Guaranteed death benefit |
| Building cash value |
| Tax benefits |
And there is even more!
Thanks to the cash value component, you can use your whole life insurance policy as storage and, by mimicking banks, set up your own independent banking system, which will allow you to finally take control of your finances.
If you’re ready to go down that road, keep in mind that this type of policy has slightly different premiums. Our suggestion is that 10 times your age is a good rule of thumb to go by if you want to use your life insurance policy for the maximum cash value.
The maximum cash-value policy can also depend on the amount of money you want to contribute monthly or annually. Of course, if you contribute more money—you will have more cash value.
And this policy is mandatory when you want to start your personal banking system.
Applying this concept allowed us to erase $140,000 in debt and help our clients generate over $75 million in death benefits! Once you understand the steps and principles, there are infinite opportunities.
Lifestyle Banking
You can’t win in a system that doesn’t let you win. However, things become easier once you become truly wealth conscious and create a system that works for you, not against you.
That’s when you start owning your lifestyle.
Lifestyle Banking is a financial strategy for utilizing a cash-value life insurance policy to grow your wealth by replacing the traditional banking system. In this process, you’re using your whole life insurance policy as a savings account.
But, in contrast to a regular savings account, you have a 4% compound interest rate. And as we mentioned earlier, you have guaranteed cash value growth and the possibility to use that money whenever and however you want.
Does this concept sound similar to infinite banking for you?
Well, we took a step forward, and we’re teaching you how to implement the banking business and use it for your goals and needs.
You don’t have to give up on your current lifestyle to create massive wealth. All you have to do is make minor changes in your mindset and resource management to start fully owning and living your lifestyle.
Watch Our Free Masterclass
The best way to start is by watching our FREE masterclass.
In just one hour, you will learn how to properly design your whole life insurance policy so you can start Lifestyle Banking. We will also show you how to use the system to erase your debts, make money, and multiply it.
Join the 1% of people who use Lifestyle Banking to finance and own their own lifestyle!