‘My Life Insurance Costs Four Lattes’: How Much Life Insurance Costs in Real-World Terms

Life insurance policies can offer hundreds of thousands of dollars of financial peace of mind, but it’s also important to consider your budget. Term life insurance tends to be an affordable way to get ample coverage without straining your everyday finances. 

But what does a year’s worth of life insurance premiums look like? These real quotes can help you wrap your head around how a life insurance policy might fit into your own budget on a daily basis. (Want another hands-on exploration of your options? We spoke to three real parents about their own life insurance decisions, and how they came to them.)

This tax season, think about using your refund on something that really matters, like a life insurance policy. Depending on the rate you receive from an insurer, your monthly premiums may be less than you imagine; a decent tax refund may even be able to cover your insurance costs for a year or more.

Note: Unless otherwise stated, all quotes are for a 20-year, $500,000 policy. The examples we use are made up for illustrative purposes, but the prices are real quotes from Fabric by Gerber Life, as of October 2022.

How Life Insurance Rates Work

Life insurance premiums are based on how insurers rate your risk, which comes down to the combination of a few factors:

• Age: The younger you are, the lower your rates, so it's smart to purchase life insurance early.

• Sex: Women tend to have a longer lifespan than men, so they often qualify for cheaper rates.

• Smoking: Using tobacco is linked to some serious health risks, so smoker's rates go up (but quitting may qualify you for lower rates again after enough time!).

• Health: Taking care of your health is one of the best ways to keep qualifying for lower rates (not to mention feeling better). Health issues will tend to make you riskier and more expensive to insure, but taking steps to manage any health conditions is good for you and your chances at affordable coverage.

Lifestyle: Life insurance quote calculators may not ask lifestyle questions, but a full application will. Driving sober and avoiding high-risk hobbies may lead to lower rates.

January

Kayla, a newlywed and New Year’s lover in New Hampshire, is ticking off one New Year’s resolution right away — get life insurance. Because she’s only 26 and a nonsmoker in excellent health, she can qualify for some of the most favorable rates out there. Her quote comes out to $19.52 per month, or roughly the cost of two ice skate rentals. 

February

Linda, a 40-year-old teacher in Pennsylvania, is in good health and doesn’t smoke. Her policy will cost an estimated $36.58 per month, or about 10 Valentine’s greeting cards. 

March

Joe, a 34-year-old living in Ohio, is looking into life insurance because he has a few health issues, putting his overall health into just “OK” territory. Even so, his estimated premium is $50.95, less than two movie tickets with drinks and a small popcorn.

April

Ryan, a 28-year-old in D.C., is in excellent health and is excited about starting a career with the IRS. He’s making the average IRS salary of about $75,000 per year, and he knows that some financial experts recommend 10 times your salary as a life insurance coverage rule of thumb. A 20-year, $750,000 policy costs him an estimated $31.05 per month. Ryan can pay that with about 1 percent of the average 2022 tax refund of $3,039.

May

Anna hadn’t thought about getting life insurance as a stay-at-home mom until her Mother’s Day celebration reminded her how much her family needs her. Anna is 32 and is in excellent health. Because she’s not employed, she applies for half her husband’s coverage amount, or a 20-year, $250,000 policy. Her monthly premium is $15.50, or about the cost of two scented bath bombs.

June

Victoria is 29 and expecting a baby. Like many parents, she’s looking into term life insurance as a way to add a layer of financial peace of mind. She has some mild health concerns, but is overall in good health, so her estimated premium is $23.89 per month. That's about the cost of a pack of diapers.

July

Shawn, a 30-year-old in Kentucky, is in excellent health except for a smoking habit. Using tobacco makes him a riskier applicant to insure, so his monthly premiums are $104.70, or about eight bottles of sunscreen. If he quits, staying tobacco-free for 5 years may qualify him for the best non-smoker rates again, or only $25.52 per month.

August

Gabriella is 37 and single, but she wants life insurance because she sometimes pitches in for her sister’s kids’ school fees and doesn’t want to leave her sister with the sole financial responsibility to care for their aging parents. Gabriella chose a 20-year, $300,000 policy that costs her $19.73 per month, or avocado toast and a mimosa at her favorite summer brunch spot.

September

Larry, a 52-year-old in Colorado, just dropped his youngest off at college. Between tuition bills and nine more years on his mortgage, he’d still like at least some life insurance coverage. A 10-year, $200,000 policy is enough to meet his needs and his health is good, so his monthly payments come out to $61.17. For the equivalent of 1.3 Colorado State sweatshirts (go Rams!), he can make sure his daughter’s college years are covered.

October

Ken, a 30-year-old man in Georgia, is considering a 20-year, $500,000 policy. He’s a nonsmoker in excellent health, so his estimated premium is $22.89 per month. That’s about the same as four pumpkin spice lattes.

November

Amanda is a 38-year-old aspiring writer doing National Novel Writing Month to finish her latest book. She’s in excellent health, so her monthly premium is $25.35, or about one hardcover book a month (and luckily for Amanda, library books are free so she doesn’t even have to give up her book habit in order to get insurance coverage!).

December

Not everyone needs a $1 million life insurance policy, but some families do. Andrew has a mortgage and three kids to put through college. Celebrating holidays reminds him of the experiences and traditions he wants to provide for financially, even if he’s not around to enjoy them. Andrew is 33 and in excellent health, so his monthly premium is $40.21, less than a tank of gas for the family minivan.

How to Afford Life Insurance

In many cases, you can get substantial life insurance coverage without making a big impact on your budget. Skipping one average Uber ride or delivery meal may be enough to cover your monthly premium. 

High inflation may understandably make you feel anxious about paying for life insurance while balancing your budget — but it’s also all the more reason to make sure you’re protecting your loved ones’ financial security as much as possible. 

One great way to start is get your own quote and think about what swaps you can make to fit life insurance into your finances.

Fabric exists to help young families master their money. Our articles abide by strict editorial standards.

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