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Is a $500,000 Life Insurance Policy Worth the Hype? Find Out!

A $500,000 Life Insurance Policy can provide enough coverage to take care of your family and expenses like a mortgage and the children’s college costs if eventually die.

Often, life insurance cost is overestimated, therefore, you should not assume that you can’t afford a $500,000 life insurance policy without first receiving life insurance quotes.

You can even see the cost of a million-dollar life insurance policy to be less than what you expected. See the next paragraph, and find out how much a $500,000 term life insurance policy costs.

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

We checked on term life insurance quotes for policies with $500,000 in coverage and discovered:

  • The average cost for a 10-year, $500,000 term life policy is $200 a year.
  • The average cost is around $275 a year for a 20-year term—if you buy life insurance in your 30s while in good health, including being a non-smoker.

Your personal life insurance quotes will differ depending on your age, health, and other factors that affect your life insurance quotes. On the contrary, our analysis of average costs for $500,000 in life insurance offers you a simple idea of the amount you should pay.

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

Average annual costs for a 10-year, $500,000 life insurance policy, here’s a table:

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 cost for a 20-year, $50,000 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

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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 one of the major factors in the cost of life insurance. Life insurance quotes will increase every year as you grow older. Moreover, you risk developing a health condition that will amount to higher quotes while waiting to buy life insurance.

One way to get the best life insurance quotes, you buy coverage as soon as the need arises.

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

  • If you hold out until age 40 to buy a 20-term $500,000 life insurance policy instead of buying at age 30, quotes go up 36% for males and 33% for females.
  • If you wait until age 50, the costs increase 212% for males and 176% for females compared to a 30-year-old.
  • Holding out until age 60 (instead of buying at age 30), the cost increases by 740% for males and 610% for females. For males, the annual rate is over $2,500 at age 60 (compared to $300 at age 30), and for females, nearly $1,800 compared to only around $250 at age 30.

$500,000 Life Insurance Policy Costs by Term Length

Purchasing a term life insurance with a longer level term period shows that you’ll pay more, but you lock in a rate longer. The level-term duration is the number of years you will lock in a static/steady annual rate, such as 10, 20, or 30 years.

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Once the level-term period elapses, you can typically renew the policy each year, however, you will likely experience much higher rates with every renewal, and then the cost may be unaffordable for you.

It’s best that you get the right term life insurance length up-front, which will save you enough money in the long run by locking in your costs within the level-term period.

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

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 evaluations discovered:

  • Moving from a 10-year term to a 15-year term raises rates 11% for males and 20% for females.
  • Upgrading from a 10-year term to a 20-year term raises rates by 39% for males and 40% for males.
  • Both genders can double the length of the term life policy (from 10 to 20 years) and not even pay 50% more for the policy.
  • To triple the time from 10 years to 30 years, males pay 105% more and females pay 87% more.

$500,000 Life Insurance Costs by Coverage Amount

We evaluated 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 quotes for other life insurance coverage levels.

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

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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 found out that:

  • Moving up to a $750,000 policy from $500,000 costs 32% more for males and 14% for females.
  • Increasing your coverage amount from $500,000 to $1 million doesn’t double your life insurance costs. It costs only 60% more for males and 38% for females to double the coverage.
  • Increasing from $500,000 to a $2 million policy gives you four times the death benefit but doesn’t quadruple the life insurance costs. Males pay 192% more and females 148% more.

Tips on Buying a $500,000 Life Insurance

While looking at $500,000 life insurance costs, first ensure that $500,000 meets your life insurance needs.

Find out what debt and other obligations your family would have once they no longer had you around. Also, covered in the review 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, skipped income, and college tuition. Once you know how much life insurance that’s needed, then think about how long the policy should last.

Source: TopCelebBio