How Much Is A $500,000 Life Insurance Policy? (2024)

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A $500,000 life insurance policy may provide enough coverage to take care of your family and expenses like mortgage and kid’s college costs if you die unexpectedly.

The cost of life insurance is often overestimated, so don’t assume that you can’t afford a $500,000 life insurance policy without first getting life insurance quotes. You may even find the cost of a $1 million life insurance policy to be much less than what you expected.

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

We analyzed term life insurance quotes for policies with $500,000 in coverage and found:

  • 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 own life insurance quotes will differ depending on your age, health and other factors affecting life insurance quotes. However, our analysis of average costs for $500,000 in life insurance gives you a basic idea of how much you can anticipate paying.

Related:

  • How Much Is A $100,000 Life Insurance Policy?
  • How Much Is A $250,000 Life Insurance Policy?
  • How Much Does A Million Dollar Life Insurance Policy Cost?

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

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

AgeMaleFemale
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

AgeMaleFemale
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

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

AgeMaleFemale
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

Compare Life Insurance Companies

Compare Policies With 8 Leading Insurers

Buying Younger Means Lower Life Insurance Costs

Age is one important factor in the cost of life insurance. Life insurance quotes will go up each year as you get older. Also, you risk developing a health condition that will cause higher quotes if you’re waiting to buy life insurance.

To get the best life insurance quotes, buy coverage as soon as the need arises.

Our analysis of $500,000 term life insurance costs finds substantial savings if you buy coverage while in your 30s. Waiting until your 50s or 60s to purchase a 20-year term life policy results in paying considerably more than if you buy coverage at a younger age:

  • 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.

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

Life insurance quotes show that gender is also a big deal to life insurance companies. Males typically don’t live as long as females, so men pay more for their policies.

Our analysis shows that males at every age will get higher quotes for $500,000 life insurance policies compared to females. The difference in costs fluctuates as they age.

For example, looking at a $500,000, 20-year term life insurance policy, here is how gender affects rates:

  • At age 30, males pay 19% more than females, nearly $50 more annually.
  • At age 40, males pay 21% more, which calculates to $72 more annually than females.
  • At age 50, males pay 34% more than females, an extra $240 annually.
  • At age 60, males pay 41% more, which comes in at $732 more annually than females.

$500,000 Life Insurance Costs by Term Length

Buying a term life insurance policy with a longer level term period means you’ll pay more, but you lock in a rate longer. The level term period is the number of years you’ll lock in a steady annual rate, such as 10, 20 or 30 years.

When the level term period ends you can typically renew the policy every year, but you’ll likely face much higher rates with each renewal, and the cost may become unaffordable.

Buying the right term life insurance length up-front will save you money in the long run by locking in your costs for the level term period.

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

TermMale age 30Female age 30

10-year term

$216

$180

15-year term

$240

$216

20-year term

$300

$252

30-year term

$444

$336

Our analysis found that:

  • 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 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 analyzed costs for $500,000 term life policies compared to other coverage amounts.

Getting quotes for various life insurance payout amounts can help you decide if a $500,000 life insurance policy will fit your budget.

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

Life insurance coverage amountMale age 30Female 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 discovered 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.
  • Moving way up 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 $500,000 Life Insurance

When you’re looking at $500,000 life insurance costs, first make sure that $500,000 meets your life insurance needs.

Determine what debts and other obligations your family would have if they no longer had you around. Your review of finances should include credit card balances, car loans, your home’s mortgage and other financial obligations. Decide if you want to provide additional life insurance money to cover lost income, college tuition and funeral expenses.

Once you know how much life insurance you need, think about how long the policy should last.

Term life insurance is good for covering obligations that have a definitive end, such as the years until you retire. If you want coverage no matter how long you live, consider whole life insurance or universal life insurance. A financial advisor or life insurance agent can also help you pinpoint the best coverage amount and policy type.

Don’t be surprised if a life insurance medical exam is required for the application process. Life insurance companies often require an exam so that they can get a detailed picture of your health. No-exam life insurance policies are becoming more widely available, but if you aren’t in excellent health, you may not qualify.

Finally, check the financial strength ratings of the life insurance companies you are considering. Ratings agencies such as AM Best and Standard and Poor’s analyze company financials and create financial strength ratings that indicate an insurer’s ability to pay its claims. Because life insurance may not pay out until decades after you buy it, a company’s financial strength is especially important.

Methodology

We analyzed term life insurance rates for healthy non-smokers of average height and weight. We averaged the four cheapest quotes we found online. Your own rates will be different depending on your age, health, driving record and other factors.

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How Much Is A $500,000 Life Insurance Policy? (2024)

FAQs

How Much Is A $500,000 Life Insurance Policy? ›

The average cost of life insurance for a $500,000 term policy is $29 per month. This coverage offers more than just funeral expense relief; it can also cover mortgage payments, educational costs and daily living expenses for years. While many insurers offer this policy, costs and benefits can vary.

How much a month is a $500,000 whole life insurance policy? ›

The average cost of a $500,000 whole life insurance policy for a healthy 30-year-old is $451 per month as of May 2024. Your personal rates depend on your age, gender, health, and hobbies, as well as how much coverage you need.

How much life insurance can I get for $100 a month? ›

How much life insurance can I get for $100 per month? You can buy $500,000 in term life insurance coverage or $100,000 in whole life insurance coverage for around $100 per month, but you'll pay less if you apply for a policy before turning 30.

What is the monthly payment on a 5 million dollar life insurance policy? ›

How much is a $5 million life insurance policy? A healthy 40-year-old woman could pay $251 per month for a $5 million, 20-year term life insurance policy. A 40-year-old man with a similar profile could pay $316 per month for the same coverage. Your age, gender, health, and lifestyle will influence your rates.

How much does a $100,000 whole life insurance policy cost? ›

On average, a $100,000 whole life policy will cost between $100-$1000 monthly, depending on various factors such as your age. Life insurance pricing is based on your actual age, gender, lifestyle, health, tobacco usage, and coverage amount.

How soon can you borrow against a life insurance policy? ›

How long does it take to borrow against life insurance? It often takes five to 10 years to accumulate enough cash value to borrow against your life insurance policy. The exact length of time depends on the structure of your policy, including your premiums and rate of return.

Can a average person get a million dollar life insurance policy? ›

Can I get a million dollar life insurance policy? If you are reasonably healthy, you will likely qualify for a million dollar policy, and if you're in your 20s, 30s, or even 40s, the cost may be lower than you think for term life coverage.

How much insurance do you get for $9.95 a month? ›

The coverage you get per 995 unit varies by your age and gender. In short, the older you are or if you're male, the less coverage you get. For example, a 68-year-old male gets $762 in life insurance coverage per $9.95 unit. A 68-year-old female would get $1,112 in coverage.

What is the monthly payment for 1 million dollar whole life insurance? ›

The average cost for a million-dollar life insurance policy is anywhere from approximately $50 to more than $1,000 a month, depending on your age, health, annual income, policy type and other factors.

How much a month is a 10 million dollar life insurance policy? ›

A healthy 40-year-old woman could pay $500 per month for a $10 million term life insurance policy with a 20-year term. A 40-year-old man with a similar profile could pay $631 per month for the same coverage. Your rates will depend on your age, health, gender, and lifestyle factors.

What is the 7 pay rule for life insurance? ›

Summary. The 7 Pay Rule is the idea that you should pay in to your IUL policy for 7 years before taking withdrawals or loans from the cash value. This rule is important for policy holders in order to maximize their cash value and ensure that they are able to capture the most out of the index's performance.

Can you have two life insurance policies? ›

Yes, you can have more than one life insurance policy at a time. While many people receive enough protection with one policy, obtaining multiple life insurance policies can be beneficial after certain life events, as part of your estate planning, and other situations.

Do you pay taxes on life insurance? ›

Generally, life insurance proceeds you receive as a beneficiary due to the death of the insured person, aren't includable in gross income and you don't have to report them. However, any interest you receive is taxable and you should report it as interest received. See Topic 403 for more information about interest.

How much do you pay for 500k life insurance? ›

Looking at $500,000 of coverage, a man in their 30s can expect to pay around $18 a month, whereas a woman would pay about $15 a month. This difference in monthly premiums increases drastically for 60-year-old applicants, where men can expect to pay around $137 a month versus $79 a month for women.

Is $500,000 a good life insurance policy? ›

A $500,000 life insurance policy may provide enough coverage to take care of your family and expenses like mortgage and kid's college costs if you die unexpectedly.

Can a 77 year old get life insurance? ›

Term or permanent life insurance may still be an option into your 60s and beyond, although you may need to take a medical exam as part of the buying process. If you're older or have health issues, there are still options available that don't require a medical exam. Learn more about your options here.

What is the average monthly payment for whole life insurance? ›

Rates vary based on health and most individuals who are considered healthy are rated as standard by most life insurance companies. In sample quotes our team pulled, a 45-year-old female might pay about $201 per month for a $100,000 whole life policy, while a 45-year-old male might pay about $215 for the same policy.

How long does it take for whole life insurance to build cash value? ›

Cash value: In most cases, the cash value portion of a life insurance policy doesn't begin to accrue until 2-5 years have passed. Once cash value begins to build, it becomes available to you according to your policy's guidelines.

What is the average return on whole life insurance? ›

The average annual rate of return on the cash value for whole life insurance is 1% to 3.5%, according to Quotacy. While whole life insurance offers fixed, guaranteed returns on your cash value, you may earn higher returns with other investments, such as stocks, bonds and real estate.

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