- Life insurance rates are based on your overall risk, including age, health, tobacco use, lifestyle and coverage amount.
- Younger, healthier applicants often pay less, while higher-risk factors can increase premiums.
- Term life is usually more affordable than whole life.
- Once your policy is active, your monthly rate usually stays the same. The only change might be a lower price if your health gets better over time.
How Are Life Insurance Rates Determined?
If you’re shopping for coverage, it’s natural to wonder how life insurance rates are set. While each insurer may define and measure risk in their own way, most companies look at a similar group of details to decide what your life insurance premiums may be. Common factors include your age, health, tobacco or nicotine use, height and weight, preexisting medical conditions and activities that may affect life expectancy.
Key Takeaways
In simple terms, life insurance rates reflect the level of risk a policyholder presents to the insurer. That means life insurance underwriting looks at several details together, not just one factor on its own. It usually comes down to your personal risk profile, the kind of policy you choose and the amount of coverage you want.
Quick takeaway: Life insurance premiums are typically lower when you’re younger and in better health. Your age, tobacco use, medical history, lifestyle and coverage amount all help determine your rate.
How life insurance rates are calculated
Insurers use underwriting to estimate how likely they are to pay a claim during the life of the policy. That process helps determine your rate class and, ultimately, your premium. In many cases, the insurer reviews:
- Your age and sex
- Your current health and medical history
- Whether you use tobacco or nicotine
- Your occupation, hobbies and lifestyle risks
- The type of policy and amount of coverage you apply for
That’s why two people applying for the same policy may receive different life insurance rates.
| Factor | How it may affect life insurance premiums |
|---|---|
| Age | Younger applicants often pay less because they typically present lower mortality risk. |
| Health history | Current conditions, medical history and overall health can affect your rate class. |
| Tobacco use | Smoking or nicotine use can raise premiums significantly. |
| Lifestyle and occupation | Higher-risk work or hobbies may increase cost. |
| Coverage amount and policy type | More coverage and permanent policies may cost more than term policies. |
What impacts the price of life insurance the most?
As part of the life insurance underwriting process, insurers usually focus on a few major pricing factors.
1. Age and sex
Life expectancy is an important factor in determining rates, so younger people will likely pay less for coverage. That’s because, on average, a 35-year-old man is more likely to live longer than a 45-year-old man.
Women tend to pay less for life insurance than men of the same age and health. In 2021, data from the Centers for Disease Control and Prevention shows that life expectancy in the U.S. was 80.2 years for women and 74.8 years for men. So, statistically, women as a group live to an older age than men do, making life insurance rates for women lower, on average.
2. Health history
Your current health and past medical history can affect your rate. However, things like diet and exercise may also be taken into account. “Having a health condition doesn’t mean you’ll get a higher rate,” says Shiela Companie, Senior Vice President and General Manager at Amica Life. “For example, the potential risk posed by slightly elevated blood pressure can sometimes be offset by medication, exercise, diet and weight reduction.”
3. Tobacco use
Given the proven relationship between smoking and mortality, rates for nonsmokers are lower than for smokers. Tobacco use can have a dramatic impact on life insurance premiums — and if you quit, you may be able to get a better rate. “Depending on how much time has passed since you’ve quit and your other health conditions, you could qualify for a nonsmoker rate,” Companie says.
4. Lifestyle and occupation
What you do on a day-to-day basis can impact your health and therefore can impact your life insurance rates. A passion for hiking or bird-watching won’t affect your premium. But if you’re into more daring leisure pursuits – skydiving or scuba diving, for example – you may see a higher premium.
Does the type of policy affect life insurance premiums?
Yes. The kind of policy you buy can change how your premium is structured. In general, term life insurance is designed for a specific period of time and is often the more budget-friendly option. Whole life insurance provides lifetime protection and builds cash value, which usually means a higher premium.
How much is life insurance per month on average?
It’s hard to pin down an “average” cost for life insurance because premiums vary widely from one person to another. The cost depends on the amount of coverage, the policy type and the applicant’s risk profile. Still, sample pricing can help you get a realistic sense of what life insurance premiums may look like. Below is a sample life insurance rates chart for a $500,000, 20-year, fully guaranteed level term life insurance policy with Amica Life. These are sample premiums for our best risks, but they can still give you a general cost snapshot.
| Age | Monthly Premium for Female* | Monthly Premium for Male* |
|---|---|---|
| 30 | $16.56 | $19.53 |
| 35 | $17.83 | $20.80 |
| 40 | $25.05 | $30.56 |
| 45 | $37.36 | $46.27 |
| 50 | $54.76 | $71.74 |
These examples show why life insurance rates usually increase with age.
Term vs. whole life insurance comparison:
| Policy type | How pricing typically works | What to know |
|---|---|---|
| Term life insurance | Level premiums for a set number of years or lifelong coverage if post-level term premiums are paid. Amica offers terms of 10, 15, 20, 25 or 30 years | Often chosen for temporary needs like income protection or mortgage coverage |
| Whole life insurance | Higher-level premiums in exchange for lifelong coverage and cash value. Amica offers three options: pay for 20 years, up to age 65 or up to age 100 | May fit long-term planning and permanent protection goals |
Want to take a deeper dive? Learn more about life insurance in general and term vs. whole life to help you decide which direction fits your needs.
Is there anything you can do to lower your life insurance rate?
It is essential that recent health improvements have stabilized and remain consistent. For example, if you’ve lost a significant amount of weight or quit smoking, most life insurers will want to verify that the change has held steady for at least a year before offering a policy at a better rate. For preexisting conditions, insurers look at both severity and control. For example, someone whose diabetes is well managed may receive a better rate than someone whose sugar levels vary regularly and widely. Stability helps insurers feel more comfortable with the risk they’re taking on.
You may also be able to keep costs more manageable by:
- Applying earlier rather than waiting until you’re older
- Choosing a coverage amount that matches your actual needs
- Comparing whether term or whole life better fits your goals and budget
Can future changes in health or lifestyle affect your rate after you get a policy?
Once a policy is issued, the rates cannot be changed by the carrier due to increased risk as long as the policy remains in force. If a policy lapses, customers may be required to provide proof of current insurability and health in order to reinstate. On the other hand, individuals can apply for rate class reductions if there’s a significant improvement in risk profile, as previously mentioned. The rate can only be decreased due to improved health, not increased due to declining health. If your health has improved, evidence is required and will include a new application and may include doctor’s reports or lab tests.
Good to know: For many policies, your premium is locked in when the policy is issued and stays the same as long as the policy remains in force. That predictability is one reason many people buy coverage earlier.
How do you apply for a life insurance policy?
If you’re comfortable with your initial quote, you’ll start an application for coverage. Some insurers may require you to meet in person or speak over the phone. Amica Life offers the convenience of starting the application online in some cases, or speaking with an Amica life insurance specialist to complete the application process together. You always have the option to contact a life insurance specialist to assist you at any point in the process. Then you’ll speak with an Amica life insurance specialist to complete medical questions on the application. However, you can contact a life insurance specialist to assist you at any point.
After your information is submitted, it’ll go through the underwriting process, when you may be asked more detailed questions to help determine the best and most appropriate rate. For most types of coverage, the premium is guaranteed for the level term period purchased or life of the policy. That’s why life insurance companies collect as much information as possible when determining your rate.
Lastly, an Amica life insurance specialist will contact you to confirm if coverage can be offered and at what rate. Or, if your application is approved as applied, you’ll be notified via email.
Get a life insurance quote today
FAQs about life insurance rates
Your age, health, tobacco use, gender, lifestyle, occupation, policy type and coverage amount.
Through underwriting. Insurers review your personal risk factors and assign a rate class that helps determine your premium.
Age, overall health and tobacco use are often some of the biggest factors, but the amount of coverage and whether you choose term or whole life also matter.
It depends on the policy. Many term and whole life policies have fixed premiums for the guaranteed period described in the policy, but rates and structures can vary by product. Also, life insurance can be paid up for whole life.
Possibly. Applying younger, improving your health, avoiding tobacco and choosing a coverage amount that fits your actual needs may help you secure a better rate.
Because pricing is based on individual risk. Two people applying for the same amount of coverage may receive different premiums if their age, health or habits differ.
Provisional Life Expectancy Estimates for 2022, Centers for Disease Control and Prevention, 2023
*Standard form number ICC15 FGCLT01-01 and FGCLT03-01 in most states and FGCLT10-04 in NY. Rate shown is for non-smoking individuals in excellent health using our Preferred Platinum rate based on a 30 to 50-year old male or female, $500,000 for 20-years. Amica monthly premium rates are available via EFT (electronic funds transfer) and are guaranteed to remain level for the 20-year period. Actual premiums will be determined by our underwriting review and will depend on your exact age and health. Actual premiums may be higher or lower. Not all plans are available in all durations and at all ages or in all states.
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ALIC01024 Apr-29