These Are the Average Life Insurance Costs by Age, According to Dave Ramsey

Anyone thinking about buying insurance coverage should read this.

How much does life insurance cost? It’s an important question everyone should ask because most people need a term life insurance policy at some point.

Life insurance provides important protection for loved ones in case of an untimely death. If at all possible, paying premiums and buying a policy should be worked into most peoples' budgets.

Finance expert Dave Ramsey recently took a look at how much different policies cost by age. The data Ramsey discovered shows some trends that insurance buyers should be aware of.

These are the average life insurance costs by age

Ramsey explained that average life insurance policy costs vary by age at the time of purchase, gender, and term length. For example:

• A 24-year-old man would pay $39 per month for a 10-year term policy; $49 per month for a 20-year term policy; and $58 for a 25-year term policy. A woman of the same age would pay $25, $35, and $43 for the same policies, respectively.
• A 54-year-old man would pay $181 per month for a 10-year term policy; $282.50 per month for a 20-year term policy; and $418.50 for a 25-year term policy. A woman of the same age would pay $131, $209, and $292.50 for the same policies, respectively.
• A 74-year-old man would pay $1,471 per month for a 10-year term policy and would likely be unable to purchase a 20-year or 30-year policy at that age. A woman of the same age would pay $952.50 and would face the same trouble buying longer-term coverage.

These premiums are representative of what the typical man or woman would pay at different ages depending on when they bought their coverage. With most standard term life policies, premiums remain the same for the duration of coverage. For example, the 24-year-old male who bought a policy for $39 per month would still be paying $39 per month nine years later and for the entire duration of the 10-year coverage term.

What do these trends mean for would-be policyholders?

It's important to understand how these average life insurance costs affect when and how much insurance coverage to buy.

It's clear from this data that premiums increase substantially as a would-be policyholder ages. This is why it’s so important to get coverage at a younger age when it is actually still affordable to buy insurance. Waiting could mean being priced out of a policy and becoming unable to protect loved ones -- especially if a pre-existing condition develops before a policy is purchased.

Longer term policies also cost more. This is worth paying if the policy needs to be in effect for longer, but it's a good idea to think about when dependents will stop relying on income and services so too much coverage isn’t purchased.

By understanding these trends, life insurance buyers can make more informed choices and get the coverage they need at a price that works for their budget. Acting sooner rather than later can help make that happen, since it can pay to buy before premiums go up due to the aging process.