Whole life insurance is a type of life insurance policy that lasts your entire life and comes with a cash value, which can act as a tax-deferred savings account. Although it’s significantly more expensive than term life insurance, if you’re already maximizing contributions to other tax-advantaged accounts or have long-term needs for coverage, it might be a good fit for you.
What are average whole life insurance rates?
A 35-year-old who doesn't smoke could pay between $243 and $288 per month for a $250,000 whole life policy, depending on their gender and health. That same person might may between $481 and $571 for a whole life policy with a $500,000 coverage amount.
Whole life insurance is five to 15 times more expensive than a comparable term policy — it’s more expensive because it’s a permanent policy that doesn’t expire, while term policies last for a set number of years. Whole life policies also come with a cash value account that you can access while you’re alive, which is another reason why they’re more expensive.
Below you can compare monthly whole life insurance rates to term life rates for a $500,000 policy.
Age | Sex | $500,000 whole life policy | $500,000 20-year term policy | $500,000 30-year term policy |
35 | Female | $481.00 | $25.43 | $38.96 |
| Male | $571.00 | $30.15 | $46.42 |
Methodology: Rates are calculated for male and female non-smokers obtaining a $500,000 whole life insurance policy, a $500,000, 20-year term policy, and a $500,000 30-year term policy based on 10 different carriers offered through the Policygenius marketplace. Individual rates will vary as specific circumstances will affect each customer's rate. Rate illustration valid as of 04/01/2023.
What factors affect the cost of whole life insurance?
Much like other types of life insurance, your age, health, and gender will affect your whole life insurance rates. The type of whole life insurance you purchase will also impact the cost of your policy.
Common whole life insurance payment options
Whole life insurance rates are commonly paid on a monthly or annual basis. Most insurance companies will set up an automatic electronic transfer from your preferred bank account in order to pay for the policy.
Many whole life insurance policies will require you to pay premiums for the rest of your life, or up until age 100. Some policies offer the option to make higher monthly or annual payments and then stop paying when you reach age 65.
Other whole life insurance payment options
Other less common whole life payment options include 10-pay and 20-pay, plans which arrange payments so your policy will be fully paid over the course of 10 or 20 years. After the payment period, you’ll no longer have to pay premiums and you’ll still have lifetime coverage. However, the premiums on these policies are more expensive than traditional whole life policies, which makes this option less practical for many people.
Average monthly whole life insurance rates by age and gender
Age | Sex | $250,000 coverage amount | $500,000 coverage amount | $1,000,000 coverage amount |
25 | Female | $175 | $346 | $660 |
| Male | $199 | $393 | $765 |
35 | Female | $243 | $481 | $947 |
| Male | $288 | $571 | $1,121 |
45 | Female | $360 | $716 | $1,417 |
| Male | $435 | $866 | $1,690 |
55 | Female | $589 | $1,173 | $2,332 |
| Male | $692 | $1,380 | $2,173 |
Methodology: Rates are calculated for male and female non-smokers in a Preferred Plus health classification obtaining a $250,000, $500,000, or $1,000,000 whole life insurance policy fully paid up at age 100 offered through MassMutual. Individual rates will vary as specific circumstances will affect each customer’s rate. Rate illustration valid as of 04/01/2023.
Average monthly whole life insurance rates payable over 20 years
Age | Sex | $250,000 coverage amount | $500,000 coverage amount | $1 million coverage amount |
25 | Female | $375 | $750 | $1,471 |
| Male | $412 | $824 | $1,621 |
35 | Female | $493 | $986 | $1,947 |
| Male | $545 | $1,089 | $2,145 |
45 | Female | $653 | $1,307 | $2,576 |
| Male | $712 | $1,425 | $2,808 |
55 | Female | $886 | $1,771 | $3,502 |
| Male | $960 | $1,920 | $3,796 |
Methodology: Rates are calculated for male and female non-smokers in a Preferred Plus health classification obtaining a $250,000, $500,000, or $1 million whole life policy paid up in 20 years, offered through MassMutual. Individual rates will vary as specific circumstances will affect each customer’s rate. Rate illustration valid as of 04/01/2023.
Average monthly whole life insurance rates payable over 10 years
Age | Sex | $250,000 coverage amount | $500,000 coverage amount | $1 million coverage amount |
25 | Female | $992 | $1,983 | $3,966 |
| Male | $1,056 | $2,112 | $4,225 |
35 | Female | $1,206 | $2,412 | $4,824 |
| Male | $1,286 | $2,572 | $5,144 |
45 | Female | $1,464 | $2,929 | $5,858 |
| Male | $1,553 | $3,106 | $6,212 |
55 | Female | $1,801 | $3,601 | $7,203 |
| Male | $1,899 | $3,799 | $7,598 |
Methodology: Rates are calculated for male and female non-smokers in a Preferred Plus health classification obtaining a $250,000, $500,000, or $1 million whole life policy paid up in 10 years, offered through MassMutual. Individual rates will vary as specific circumstances will affect each customer’s rate. Rate illustration valid as of 04/01/2023.
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How to buy whole life insurance
Buying whole life insurance is similar to buying other types of life insurance.
First, you’ll fill out an application and have a phone call with an agent.
Then, in most cases, you’ll take a medical exam. This is similar to an annual physical.
After that, the insurance company will review your application and offer you your final rate, which can take four to six weeks.
Once you sign your policy paperwork and pay your first premium, you’re covered.
Working with an independent broker can help you find the best insurance policy for you and walk you through the application process. At Policygenius, our experts are licensed in all 50 states and can provide you with unbiased advice on where to start.
Common whole life insurance payment options
Whole life insurance rates are commonly paid on a monthly or annual basis. Most insurance companies will set up an automatic electronic transfer from your preferred bank account in order to pay for the policy.
Many whole life insurance policies will require you to pay premiums for the rest of your life, or up until age 100. Some policies offer the option to make higher monthly or annual payments and then stop paying when you reach age 65.
Other whole life insurance payment options
Other less common whole life payment options include 10-pay and 20-pay plans, which arrange payments so your policy will be fully paid over the course of 10 or 20 years. After the payment period, you’ll no longer have to pay premiums and you’ll still have lifetime coverage. However, the premiums on these policies are more expensive than traditional whole life policies, which makes this option less practical for many people.
What is whole life insurance and how does it work?
Whole life insurance is a type of permanent life insurance that provides coverage for your entire life. You pay a premium, usually monthly or annually, and in exchange, the insurance company will pay a tax-free death benefit to your beneficiaries upon your death.
A portion of your premium goes toward the cost of maintaining the insurance policy and the rest goes toward a cash value account, which gains interest. How your cash value grows depends on the type of whole life insurance policy you have. Some whole life insurance policies also pay out dividends depending on the performance of the insurer.
Benefits of whole life insurance
Lasts your whole life, so you don’t have to worry about it expiring
Has a cash value account, which can serve as another tax-deferred investment option if you already maxed out your other retirement accounts
Drawbacks of whole life insurance
Five to 15 times more expensive than term life insurance, so it can be expensive to keep the coverage that you need
Possibility of surrender fees if you stop paying on the policy
Other investment options offer higher rates of returns
What does whole life insurance cover?
Ultimately, whole life insurance will guarantee a death benefit – a lump sum of money – to your family if you die. Whole life insurance can be used for a variety of purposes, though, including:
Estate planning: The death benefit can be used to offset estate tax if you’re above your state threshold, or the federal threshold, which is $12.92 million as of 2023.
Retirement: The whole life insurance cash value can be used to help fund retirement, since you don’t pay taxes on withdrawals after age 59 ½.
Funeral and burial costs: The whole life insurance death benefit doesn’t have to go through probate court, which means it’s easily accessible for your beneficiaries to use to assist with funeral or burial costs
Inheritance funds: Whole life insurance can be used to make sure your beneficiaries have a set inheritance, separate from the rest of your estate.
How does whole life insurance differ from term life insurance?
The main differences between whole life and term life are:
The length of your coverage: Whole life is permanent coverage, while term life lasts for a set number of years and then expires.
The premium costs: Whole life is five to 15 times more expensive than term life.
The cash value: Whole life has a separate cash value account, while term life does not.
Is whole life insurance worth the cost?
Whole life insurance is best for specific circumstances, like people who are maximizing contributions to tax-advantaged accounts like a Roth IRA or 401(k) and have the budget for an additional investment option, people with lifelong dependents, or people with high net worths and unique estate planning needs.
If you’re not sure if whole life insurance is worth it for you, working with a financial planner or insurance professional can help you compare prices and policies.
Frequently asked questions
How much does whole life insurance cost?
A 35-year-old with minimal health conditions can pay about $571 per month for a $500,000 coverage amount. Whole life costs five to 15 times more than term life insurance on average. How much whole life insurance costs depends on your age, health, gender, and the type of policy you’re purchasing, but a licensed agent can give you specific quotes.
Is whole life insurance a good investment?
Traditional investment accounts typically offer higher returns than whole life insurance policies. If you have a high income and have already maxed out other investment options, whole life insurance can provide an additional tax deferred account.
Does whole life insurance pay out the full amount when you die?
In most cases, your beneficiary will receive the full death benefit amount when they file a claim. However, if you have an outstanding loan that you took out against your cash value, the remaining amount will be subtracted from the death benefit if you die before paying it back.
What is the average interest rate on whole life insurance?
Whole life insurance policies typically have an interest rate set by your insurer, so you can ask your agent for the specifics if you’re deciding to purchase a policy. The average annual interest rate is 1.5% according to Consumer Reports.
How much is a $50,000 whole life insurance policy?
It depends on your age and health – a 35-year-old with minimal health conditions can pay around $66 per month for a $50,000 whole life policy.
How much is a $100,000 whole life insurance policy?
It depends on your age and health – a 35-year-old with minimal health conditions can pay around $120 per month for a $100,000 whole life policy.
