InsuranceLife Insurance

How Much Is A $500,000 Life Insurance Policy (500k life insurance policy)?

If you were to pass away suddenly, a $500,000 life insurance policy (500k life insurance policy) might be sufficient to pay your family’s financial obligations, including your mortgage and children’s education bills.

Don’t assume that you can’t afford a $500,000 life insurance policy without first seeking life insurance quotes because the cost of life insurance is frequently underestimated. You might be surprised to learn that a $1 million life insurance coverage costs far less than you anticipated.

How Much Does a $500,000 Term Life Insurance Policy Cost?

Following a review of term life insurance rates for policies with a $500,000 insurance policy, we discovered:

  • A 10-year, $500,000 term life insurance coverage typically costs $200 a year.
  • If you purchase life insurance in your 30s and are in good health, including not smoking, the average cost is about $275 per year for a 20-year term.

Depending on your age, health, and other factors affecting life insurance quotations, your own life insurance quotes will vary. However, our examination of typical premiums for life insurance coverage of $500,000 offers you a general indication of what you might expect to pay.

$500,000 Term Life Insurance Average Costs by Age and Gender

Average annual costs for a 10-year, $500,000 term life insurance policy

Age Male Female
30 $216 $180
35 $216 $192
40 $276 $264
45 $372 $312
50 $564 $432
55 $888 $648
60 $1,392 $948

Average annual costs for 15-year, $500,000 term life insurance policy

Age Male Female
30 $240 $216
35 $252 $240
40 $348 $300
45 $468 $372
50 $708 $528
55 $1,152 $768
60 $1,824 $1,260

Average annual costs for 20-year, $500,000 term life insurance policy

Age Male Female
30 $300 $252
35 $312 $264
40 $408 $336
45 $612 $468
50 $936 $696
55 $1,500 $1,068
60 $2,520 $1,788

Average annual costs for a 30-year, $500,000 term life insurance policy

Age Male Female
30 $444 $336
35 $480 $384
40 $684 $528
45 $1,044 $768
50 $1,680 $1,200
55 $3,084 $2,160
60 N/A N/A

Buying Younger Means Lower Life Insurance Costs

Age is a significant element in determining the price of life insurance. As you get older, your life insurance quotations will increase annually. Additionally, if you wait to purchase life insurance, you run the danger of having a health issue that will result in higher quotations.

As soon as a need arises, purchase coverage to get the best life insurance quotes.

Our examination of the price of a $500,000 term life insurance policy reveals significant cost savings if you purchase coverage in your 30s. A 20-year term life insurance policy costs significantly more if you wait until your 50s or 60s to get it than if you purchase it earlier in life:

  • If you wait until age 40 to purchase a $500,000, 20-term life insurance policy instead of doing so at age 30, rates increase by 33% for women and 36% for men.
  • When compared to a 30-year-old, the prices rise by 212 percent for men and 176 percent for women if you wait until age 50.
  • Males pay 740 percent more when they wait until age 60 to purchase than females do when they buy at age 30. At age 60, the yearly rate for men is over $2,500 (compared to $300 at age 30), and at age 60, the annual rate for women is approximately $1,800 (compared to just around $250 at age 30).

How Gender Affects the Cost of $500,000 Life Insurance

Gender is a significant factor for life insurance companies, according to life insurance rates. Men pay more for their insurance premiums since they typically live shorter lives than women.

$500,000 Life Insurance Policy
$500,000 Life Insurance Policy

According to our data, men will always receive rates for $500,000 life insurance plans that are greater than those for women. As they become older, the cost differential changes.

Here is how gender influences rates when considering a $500,000, 20-year term life insurance policy:

  • Males pay 19% more than females at age 30, or almost $50 more annually.
  • Males pay 21 percent more at age 40 than females do, or $72 more per year.
  • Males spend $340 more annually, or 34%, more than females at age 50.
  • Males pay 41 percent more at age 60 than females do, or $732 more yearly.

$500,000 Life Insurance Costs by Term Length

You will pay more but lock in a rate for a longer length of time if you get term life insurance with a longer level term duration. The level term period, which might be 10, 20, or 30, is the number of years you’ll lock in a consistent annual rate.

When the level term expires, you can usually renew the policy every year, but the cost might become unmanageable because you’ll probably have to pay substantially higher rates each time.

By securing your expenses for the full term period, choosing the appropriate term length for term life insurance upfront will save you money over time.

Here we compare costs for various lengths of policies for a $500,000 life insurance for a 30-year-old male and female.

Average annual costs by term length for a $500,000 life insurance policy

Term Male age 30 Female age 30
10-year term $216 $180
15-year term $240 $216
20-year term $300 $252
30-year term $444 $336

Our research revealed that:

  • Rates increase by 11% for men and 20% for women when the term is increased from 10 to 15 years.
  • The rate increases by 39 percent for men and by 40 percent for men when the term length is increased from 10 to 20 years.
  • The term of life insurance coverage can be extended by two times, from ten to twenty years, without costing any extra money.
  • Males spend 105 percent more and females pay 87 percent more to treble the period from 10 years to 30 years.

$500,000 Life Insurance Costs by Coverage Amount

We compared the costs of $500,000 term life insurance policies to those for different levels of coverage.

You can determine whether a $500,000 life insurance policy will match your budget by comparing quotations for other life insurance payment amounts.

Average annual costs by coverage amount for 20-year term life insurance

Life insurance coverage amount Male age 30 Female age 30
$100,000 $108 $108
$250,000 $192 $168
$500,000 $300 $252
$750,000 $396 $288
$1 million $480 $348
$2 Million $876 $624

We learned that:

  • For males and females, the price increase from a $500,000 policy to a $750,000 policy is 32% and 14%, respectively.
  • It doesn’t cost twice as much to buy $1 million worth of life insurance if you increase your coverage from $500,000 worth. To double the coverage, men only pay 60% more, and women only pay 38% more.
  • Even if the death benefit is increased by four times when you go from a $500,000 to a $2 million policy, the cost of life insurance does not increase by four times. Females pay 148 percent more, while males pay 192% more.

Tips on Buying $500,000 Life Insurance

Make sure that $500,000 will meet your life insurance needs before looking at $500,000 in life insurance costs.

Find out what financial duties and other commitments your family would face without you. Included in your examination of your finances should include credit card balances, auto loans, your mortgage, and other debts. Decide if you want to purchase more life insurance coverage to pay for funeral costs, missed income, and college tuition.

Consider the duration of the coverage after determining the amount of life insurance you require.

Term life insurance is useful for covering liabilities with definite expiration dates, such as the years until retirement. Consider whole life or universal life insurance if you want coverage no matter how long you live. You can also get advice from a financial counselor or life insurance salesperson about the ideal level of protection and type of policy.

If a life insurance medical exam is necessary for the application process, don’t be shocked. Exams are frequently required by life insurance companies so that they can have a complete picture of your health. There are more and more no-exam life insurance policies available.

Last but not least, look into the life insurance businesses’ financial strength ratings. Rating companies like AM Best and Standard and Poor’s examine the financial statements of businesses to produce financial strength ratings that show an insurer’s capacity to fulfill its claim obligations. The financial stability of a corporation is particularly crucial because life insurance may not start paying out until decades after you purchase it.

How much does a $500k life insurance policy cost?

That depends on a number of things, including your gender, age, whether you smoke, and how healthy you are overall. Take into account the typical monthly premium for life insurance for healthy, 35-year-old males and girls who don’t smoke. Females may pay an average monthly premium of $41 for a 10-year term policy*, while males may pay about $51. These premiums increase to $80 and $104 per month, respectively, for a 30-year term policy*.

Methodology

We examined the costs of term life insurance for healthy non-smokers who were of average height and weight. The four cheapest prices we located online were averaged. Depending on your age, health, driving history, and other criteria, your personal rates will vary.

Read Also:

Best Cheap Car Insurance for Young Adults for 2022

Life Insurance for Self-Employed People

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