What Does $500,000 Term Life Insurance Cost?

Clifford PendellWritten by Clifford Pendell, Managing Partner and Co-founder

Woman calculating insurance cost

So you’ve decided that you’d like to purchase $500,000 of life insurance coverage.

Your next question is - how much does that cost?

The answer depends on a variety of different factors including your age, gender, overall health, policy length, and the company you choose to apply with. 

This article outlines the different term lengths available and explains which situation each one is best suited for. We'll also help you determine if should take a medical exam when you apply, and we've provided some sample quotes for 10, 15, 20, and 30-year policies to help you get started. 

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The Different Term Lengths

Term life insurance is a type of life insurance policy that is in force for a certain number of years. Those terms include: 10, 15, 20, 25, 30, 35, or 40 years (Banner Life and Protective now offer 35 and 40-year terms). But how do you know which term length to choose? Let’s break it down.

10-Year Term: This term length is good if you are looking to collateralize a business loan, fund a buy/sell agreement, or if you’re just wanting to purchase the most coverage for the least amount of money possible.

15-Year Term: This can be good for parents who have kids in preschool or kindergarten and plan on sending them to college. It’s also good for those who may be 15 years or less away retirement, and want that financial security and protection for their family until then.

20-Year Term: This is the most common term length; people often buy this length to secure the breadwinners income until their children move out.

30-Year Term: These term lengths are typically chosen by people who have a mortgage or want protection until retirement age. They’re also good for those who have young children or a special needs child. 35 and 40-year terms are also usually chosen for the same reasons.

Rate Classes

When you apply for life insurance, you will get put into a particular rate class, which will determine your life insurance rates. The further you go down in rate classes, the more lenient they are (as well as more expensive). Prices will vary depending on gender (males pay more), age, your health, family history, lifestyle, occupation, etc.

There are four main classes: preferred best, preferred, standard plus, and standard. There are also substandard rates called table ratings. Here’s a closer look at each:

Preferred Plus

  • Excellent health overall
  • No history of drug or alcohol abuse
  • Clean driving record
  • No tobacco/nicotine use in the past 3-5 years
  • No family history of health-related death, heart disease, or cancer before age 60
  • No record of illegal activities/felonies
  • No hazardous activities/occupations (e.g. skydiving, bungee jumping, private pilot, etc.)

Preferred

  • Excellent health overall
  • No history of drug or alcohol abuse
  • Good driving record
  • No tobacco/nicotine use in the past 2-3 years
  • No family history of health-related death or heart disease before age 60 (some cancers are allowed)
  • No record of illegal activities/felonies
  • No hazardous activities/occupations
  • Well-controlled blood pressure or cholesterol for at least 1 year

Standard Plus

  • Good (above average) health overall
  • No history of drug or alcohol abuse
  • Good driving record
  • No tobacco/nicotine use for at least 1 year
  • Minor issues related to heart disease or cancer prior to age 60 in family history
  • No record of illegal activities/felonies
  • No hazardous activities/occupations
  • Minor blood pressure or cholesterol issues (monitored)
  • Minor weight issues allowed (BMI<28)

Standard

  • Average health overall
  • No history of drug or alcohol abuse
  • Good driving record
  • No tobacco/nicotine use for at least 1 year
  • Loss of 1 parent/sibling prior to age 60 from health related issues allowed
  • No illegal activities
  • No hazardous activities/occupations
  • Minor blood pressure or cholesterol issues (monitored)
  • Minor weight issues allowed (BMI<30)

Factors that Can Affect Your Rate Class

We’ve already briefly touched on what goes into the decision of your rate class placement, but let’s dive in a little deeper on what specifically affects it.

1. Your Weight

Now don’t get us wrong, you don’t have to be in Superman shape to get preferred best rates, but if you are overweight or obese, it will negatively impact your rates. Underwriters us what they call “build charts,” in which they have a weight/BMI range for each height. If yours falls outside of the range, you may be given higher rates.

Another reason life insurance companies take weight into account is because with higher weight typically comes health problems, such as Diabetes or heart issues. This creates more of a risk for the company, and they compensate that by charging you a higher premium.

2. Smoking/Tobacco Intake

It’s no surprise that smoking and tobacco use is terrible for your health. When it comes to life insurance, there are non-tobacco and tobacco rates. If you have used tobacco or smoked at all within the past year, you will most likely be given tobacco rates, which can be 2-3x more expensive than non-tobacco rates. So do your wallet and lungs a favor - quit this nasty habit!

3. Driving Record

If you haven’t guessed, the general theme of life insurance is that the higher risk you are to them, the more they will charge you on premiums.

Relating this to your driving record, if you have a history of getting into fender benders or accidents, that puts you at a higher risk to them, therefore resulting in higher premiums. However, don’t worry - this doesn’t usually apply to things like parking tickets.

4. Medical Conditions

Things such as cancer, heart disease, diabetes, asthma, and even mental health disorders like anxiety or depression can have an impact on life insurance rates. This includes family history, as some diseases can be hereditary.

5. Hazardous Activities/Occupations

Now if knitting is your idea of a fun time, this section won’t apply to you. But if you like to go skydiving, bungee jumping, scuba diving, kayaking, etc., your rates will most likely be affected. This also goes for hazardous jobs, such as private pilots, loggers, roofers, etc.

Medical Exams - Yay or Nay?

When you apply for a traditional life insurance policy, they will ask you to undergo a medical exam during your application. The exam typically takes less than 30 minutes, and you can have an examiner come to your home/office, or you can go to your doctor’s office to complete it.

They will check your height, weight, and blood pressure. In addition, they’ll obtain blood and urine samples and test your cholesterol, glucose (or perform an A1C test), as well as check for illicit drugs. Depending on your age and the amount of coverage you applied for, they may also do an EKG on your heart.

Originally, traditional life insurance policies were much less expensive than no medical exam policies. However, in the past few years, no-exam policies have become increasingly more popular, and thus have become more affordable as well.

So, should you take an exam when applying?

If you are under the age of 60, and are in average or better health, you may not have to. However, if you have any health issues or are over the age of 60, we recommend that you take an exam to get the best rates possible.

To give you an idea, here’s a comparison of no-exam vs. exam pricing for different term lengths. These rates are for a 45 year old male and female in “preferred” health.

Exam vs. No Exam for 45 Year Old in Good Health

Term LengthNo ExamExam
MaleFemaleMaleFemale
10-Year-Term$57.23$40.69$33.55$29.65
15-Year-Term$77.15$51.11$41.19$33.97
20-Year-Term$134.60$95.33$54.91$42.82

*Monthly Rates are accurate as of 06/10/2022 and are provided for illustrative purposes only. 

Sample Term Life Rates

Finally, getting to the good stuff (and what you're really reading this article for). So without further ado, here are sample female and male (in preferred health) term life insurance rates for $500,000 of coverage.

$500,000 Coverage Female Term Rates

Age10-Year Term20-Year Term30-Year Term
35$15.22$22.14$34.58
40$19.53$30.01$46.53
45$29.65$42.82$70.38
50$42.13$65.35$110.36
55$60.61$96.92$185.38
60$90.46$161.43N/A
65$134.11$316.17N/A

$500,000 Coverage Male Term Rates

Age10-Year Term20-Year Term30-Year Term
35$17.40$25.97$41.16
40$21.86$35.11$58.99
45$33.55$54.91$93.57
50$50.51$79.76$151.20
55$76.56$128.21$279.60
60$120.56$212.81N/A
65$220.01$448.97N/A

*Monthly Rates are accurate as of 06/10/2022 and are provided for illustrative purposes only.

Note: One question we get asked a lot about term life insurance is if the rates increase every year. Good news - they don’t! Your rates will stay level throughout the entire term. Only after the term ends will the rates increase, if you choose to continue the policy.

Questions? We Can Help!

Life insurance can seem complicated, but it doesn't have to! We're here to help.

At JRC Insurance Group, our agents are experts with multiple years of experience. We are appointed by dozens of top-rated life insurance companies and our agents are not pushy salespeople.

Our agents do not have quotas; we’re here to help. We have helped hundreds of clients, and we can help you too. Our passion is finding our clients affordable life insurance coverage to protect their families.

Give us a call today, we would love to help! Toll free: 855-247-9555, or request a free quote here.

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Clifford Pendell

Clifford Pendell

Managing Partner and Co-founder

Cliff is a licensed life insurance agent and one of the owners of JRC Insurance Group. He has helped thousands of families of businesses with their life insurance needs since 2012 and specializes with applicants who are less than perfect health. In his spare time he enjoys spending time with family, traveling, and the great outdoors.

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