How Life Insurance Rates Affect Your Policy

Life insurance is an easy way to provide for your loved ones after you pass away. If you are interested in purchasing a life insurance policy, it is generally a good idea to shop around so you can find the best deal possible. In order to do this, it is helpful to have a working knowledge of exactly what constitutes a good whole life insurance or term life insurance rate and what comprises a life insurance policy that provides good value.

Factors in Determining Your Life Insurance Rate

Knowing how much an average life insurance policy should cost can be very difficult, because policy rates vary erratically from one life insurance company to another. Insurance companies generally do not like publishing information on their life insurance quotes for exactly this reason.

Life insurance rates are based on basic information about the potential policyholder. A person's age and general health are going to be very important factors in determining the cost of the annual life insurance premium.

If you are young, healthy, and a non-smoker, you can expect to pay a much lower life insurance rate than someone your age that is a smoker. This added danger of smoking to the health of an individual increases a person's insurance premiums, because smoking increases the chance that the smoker will die at a younger age. If the smoker dies before his or her natural time, this could potentially cost the life insurance company a lot of money.

Women generally have to pay less for life insurance because they typically live longer. For some companies this advantage is minimal, but it is a more pronounced benefit for other women.

The area of the country you live in will also affect your life insurance quote. The average cost of living varies drastically across regions of the country; a life insurance policy that is considered reasonably priced in an expensive area, such as the densely populated coastal regions, would be unacceptable in a lower-priced region, like the Midwest. For example, Iowa insurance quotes would be significantly lower than Florida insurance quotes.

Your lifestyle might also affect the amount of coverage you want to purchase and, therefore, how much your life insurance rate will run. If you want a life insurance policy that will cover just the costs of your burial, then you will need a lot less coverage than someone interested in leaving their families money to cover living expenses once they are gone.

Types of Life Insurance

There are two main types of life insurance policies. These are term life insurance and whole life insurance. Term life insurance is a temporary life insurance policy that provides a policyholder with the convenience of insurance protection, and the flexibility of being able to change their basic life insurance policy structure as their life changes.

Whole life insurance is a much more consistent life insurance policy type. These policies are generally permanent and their rates are not subject to change by the insurance company. As long as you continue to pay your premiums, your policy cannot be canceled and your benefits cannot be lowered.

Initially, term life insurance rates are cheaper than whole life insurance rates. For someone just getting started in life, these lower rates can allow them the opportunity to protect themselves and their family without over extending their budget.

Term life insurance policies can be a good short-term option. They can be renewed every few years, depending on your policy, but your term life insurance rate will generally increase as your age increases.

Rates on whole life insurance policies are not subject to change with your age. Many jurisdictions actually have government regulations in place that protect policyholders by limiting how much a life insurance rate can increase due to inflation.

Example of Life Insurance Rates

Due to the secrecy surrounding life insurance rates, it is difficult to get a general idea of what a policy should cost without some real detective work. The following examples are only a representation of what can be found regarding a life insurance quote.

While these figures are designed to give you an idea of what you could expect to pay for in a policy, they are just a basic guide and should only be taken as a sample. Any actual life insurance quote you receive is going to be based on your individual situation and history.

For a 30-year term life insurance rate, a 35-year-old nonsmoking woman from the Midwest could expect to pay between $650 and $800 for a million-dollar policy. The same woman could expect to pay between $700 and $850 in New York State.

A twenty-year-old smoking man from the west coast should expect to pay somewhere between four and five thousand dollars a year for a $750,000 whole life policy. If he were a non-smoker he would pay somewhere between $2500 and $3500 a year.


Many people like the idea of leaving their families financially secure when they pass away, especially if it is suddenly. Having created a method to provide for someone after you have gone can give you and your heirs a secure feeling about what might happen tomorrow.

Finding low cost life insurance can be very easy, especially when you use the Internet to shop life insurance rates. Finding the right policy, for the right price can be a bit trickier. Knowing what you are looking for can make the process much easier.

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