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How much does a $500,000 life insurance policy cost?
The cost of a $500,000 life insurance policy varies from person to person. Factors like age, gender, health, and lifestyle all influence how much you pay for your policy. The type of policy also matters, with term life insurance costing less than a whole life insurance policy. Find out how much you’re likely to pay for a $500,000 life insurance policy based on age, gender, and policy type.
- How much is a $500,000 life insurance policy worth?
- How much does $500,000 of term life insurance cost?
- How much does $500,000 of whole life insurance cost?
- Factors impacting life insurance policy costs
- Why do I need $500,000 of life insurance coverage?
- How do I get the best quotes for $500,000 of life insurance coverage?
- Tips to lower life insurance premium
- Frequently asked questions
How much is a $500,000 life insurance policy?
The cost of a $500,000 life insurance policy varies based on several factors, the most important being the type of policy (term or permanent). Other factors that can affect the cost of life insurance are age, health, and smoking status.
For instance, a healthy 30-year-old non-smoker may have to pay around $20 to $30 per month for a 20-year term life insurance policy. The monthly premiums for a whole-life policy would be significantly higher. It may range between $200 to $400 or more.
If you want to find out immediately how much $500,000 of life insurance would cost for you, go ahead and get a free online quote from us. For more details on pricing and how it’s determined – read on.
How much does $500,000 of term life insurance cost?
Term life insurance is coverage that lasts for a specific period of time known as – you guessed it – term. That term can be a fixed number of years or until you reach a certain age (e.g. age 65). You pay premiums to your life insurance provider until the expiry of the term.
In return, your beneficiaries will receive a tax-free death benefit if you die within the term of the policy. Once the term ends, your coverage also expires, and you can stop paying premiums.
Term life insurance pricing is based on the length of term, health, age, smoking status, and the amount of the death benefit. For our purposes, we are looking at a death benefit of $500,000.
Term life insurance costs – Male, $500,000 Coverage
| Age | Non-Smoker | Smoker |
|---|---|---|
| 30 | $22.32 | $42.30 |
| 35 | $22.50 | $46.80 |
| 40 | $28.80 | $67.95 |
| 45 | $43.20 | $113.40 |
| 50 | $66.60 | $202.05 |
| 55 | $115.20 | $336.15 |
| 60 | $199.77 | $494.55 |
| 65 | $355.50 | $856.80 |
Term life insurance costs – Female, $500,000 Coverage
| Age | Non-Smoker | Smoker |
|---|---|---|
| 30 | $16.20 | $26.55 |
| 35 | $17.10 | $34.65 |
| 40 | $20.52 | $54.00 |
| 45 | $29.25 | $81.45 |
| 50 | $46.80 | $126.62 |
| 55 | $80.10 | $189.86 |
| 60 | $140.85 | $305.20 |
| 65 | $233.54 | $463.25 |
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Term life insurance rates by age
Term life insurance rates can differ based on the individual’s age. Here’s a summary of average monthly costs by age group for a typical term policy with a coverage amount of $500,000:
| Age Group | Term life – Non-smoker male | Term life – Non-smoker female |
| MALE | FEMALE | |
| 25-34 | $13 | $13 |
| 35-44 | $18 | $18 |
| 35-44 | $40 | $40 |
| 55-64 | $80 | $80 |
| 65+ | $150 | $150 |
| Age Group | Term life – Smoker male | Term life – Smoker female |
| MALE | FEMALE | |
| 25-34 | $30 | $25 |
| 35-44 | $45 | $35 |
| 35-44 | $100 | $80 |
| 55-64 | $180 | $150 |
| 65+ | $350 | $300 |
How much does $500,000 of whole life insurance cost?
Whole life insurance is a form of permanent life insurance that gives a policyholder with coverage from the day their policy is enacted until they pass away; in other words – their whole life. As long as one keeps the policy’s premiums in good standing, the coverage does not expire.
Furthermore, whole life insurance combines this financial protection with investing. Whole life insurance policies have an associated cash value. As one pays into their whole life policy a portion of the premiums are invested and generate cash value.
This cash value is accessible while the policyholder is still living. They can either withdraw from the cash value or borrow against it. Because the coverage lasts one’s entire life and they retain the value put into it, whole life insurance has higher premiums.
Similarly to term life insurance, whole life insurance pricing is based on the health, age, smoking status, the death benefit, and the added expense of insuring someone’s life for such an extended period of time and potentially their riskiest years.
Non-Participating Whole life insurance – $500,000 Coverage
| Age | Non-Smoker | Smoker |
|---|---|---|
| 30 | $257.40 | $257.40 |
| 35 | $322.20 | $322.20 |
| 40 | $391.05 | $391.05 |
| 45 | $522.00 | $522.00 |
| 50 | $631.35 | $631.35 |
| 55 | $832.95 | $832.95 |
Participating Whole life insurance – $500,000 Coverage
Cost of a $500,000 permanent life insurance policy
Permanent life insurance policies can be categorized into different types. A whole-life policy is a type of permanent insurance that offers added benefits such as cash value accumulated over time.
However, permanent policies can be a little expensive as compared to term insurance policies.
The following table is an illustration of the cost of a whole life insurance policy for $500,000 coverage in Canada:
| Age Group | Whole life – Non-smoker male | Whole life – Non-smoker female |
| MALE | FEMALE | |
| 25-34 | $275 | $250 |
| 35-44 | $350 | $300 |
| 35-44 | $500 | $425 |
| 55-64 | $750 | $625 |
| 65+ | $1,200 | $1,000 |
| Age Group | Whole life – Smoker male | Whole life – Smoker female |
| MALE | FEMALE | |
| 25-34 | $350 | $300 |
| 35-44 | $475 | $400 |
| 35-44 | $700 | $575 |
| 55-64 | $1,100 | $900 |
| 65+ | $1,800 | $1,500 |
What factors impact the cost of your life insurance premium?
Several factors significantly impact the cost of your life insurance premium. Check out some of the most prominent factors:
1. Age and health of the insured
Age is a primary factor. Younger individuals generally pay lower premiums since they are considered lower risk. Health also plays a crucial role. Those in good health typically receive lower premium rates.
Pre-existing medical conditions, a family history of serious illness, or poor health indicators like high blood pressure or obesity can lead to higher premiums.
2. Type of policy
The type of life insurance you choose greatly affects the cost. Term life insurance is usually less expensive because it offers protection for a set time frame with no cash value.
Alternatively, permanent life insurance, such as whole or universal life, is more expensive. These policies provide lifelong coverage and include a cash value component that can grow over time.
3. Length of coverage
The duration of the policy also impacts premiums. Longer-term policies come with higher costs because the insurer’s risk increases over time. For term life insurance, a 30-year policy will generally be more expensive than a 10-year policy.
4. Lifestyle and habits
Your lifestyle choices and habits have a significant effect on life insurance costs. Smokers pay much higher premiums than non-smokers. This is because smoking is associated with a higher risk of health issues and early death.
Additionally, if you engage in high-risk activities or have a dangerous occupation, your premiums will likely be higher than usual.
Even lifestyle factors like alcohol consumption or driving history can influence life insurance premium rates. Insurers assess the overall risk of your profile before offering you an insurance policy.
Why do I need $500,000 of life insurance coverage?
Different personal financial situations dictate someone’s needs for a substantial benefit. While your needs will be unique to yourself and those you are aiming to protect financially, some reasons to contemplate $500,000 of life insurance include:
- Covering an outstanding mortgage debt, credit cards, or joint lines of credit
- Cost of living for a partner or dependents left behind
- Education costs for grown children
- Covering business partners
If you are not sure if $500,000 life insurance is the right amount for you, there’s an easy way to double check. Head to our life insurance calculator; it takes less than 5 minutes to answer a few simple questions and find out exactly how much coverage you need.
How do I get the best quotes for $500,000 of life insurance coverage?
At PolicyAdvisor, we have helped Canadians compare quotes from 17 of the country’s best life insurance companies and find the right fit for their coverage needs. Book some time with our licensed advisors and find out how easy it is to get the right amount of coverage – from the comfort of your own home.
Frequently asked questions about $500,000 life insurance
What factors determine the cost of a $500,000 life insurance policy?
Several factors influence the cost of a $500,000 life insurance policy. These include age, with younger individuals paying lower premiums. Family medical history, current health status, and lifestyle habits like smoking also play significant roles.
How much does a $500,000 term life insurance policy cost on average?
On average, a male nonsmoker may pay an average of $100 per month, whereas a female nonsmoker may pay an average of $80 per month.
A male smoker may pay an average of $180, whereas a female smoker may pay an average of $120 per month for a term life insurance policy with a $500,000 coverage amount.
Is a medical exam required to get a $500,000 life insurance policy?
A medical exam is commonly required to obtain a $500,000 life insurance policy. However, some insurers offer “no medical exam” policies, where you can obtain coverage without an exam.
These policies often come with higher premiums and may limit coverage amounts or have stricter eligibility criteria.
How do term life and whole life insurance costs compare for a $500,000 policy?
For term life insurance, the average per month cost may range somewhere between $100-$180 for men and $80-$120 for women.
For a whole life insurance policy, the monthly cost may be much higher, ranging between $600-$800 for men and $400-$700 for women. This is due to the added benefits of cash value and dividends that a participating whole life insurance policy offers.
- A $500,000 life insurance policy will vary in cost depending on the insured’s age, gender, health, smoking status, and policy type.
- A term life insurance policy worth $500,000 will generally cost less than a whole insurance policy worth the same amount.
- A 40-year-old non-smoking male can pay less than $50/month for a 20-year term life insurance policy with a death benefit of $500,000. A whole life insurance policy can cost closer to $400/month.
