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

Life insurance policies can help with 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. 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 January 2025.

Factors That Affect Term Insurance Rates

Life insurance premiums are based on how insurers rate your risk, which comes down to the combination of a few factors—some of which you can control and others you can’t.

Term life insurance factors you can’t control

Age and gender are two big factors in the price of life insurance. Younger people generally have fewer health risks and a longer estimated lifespan left, so the younger you are, the lower your rates tend to be. For that reason, it’s smart to purchase life insurance early.

Term life insurance costs for men tend to be higher than women due to lower statistical life expectancy. Men are also more likely to have certain dangerous jobs or some other lifestyle risk factors (e.g., driving under the influence) than women, which can impact life insurance rates.

Here are some example monthly quotes as of January 2025, through Fabric by Gerber Life. These are based on $500,000 in coverage over 15 years for non-tobacco-users living in Michigan who are in excellent health.

Term life insurance factors you can (usually) control

You may not have perfect control over every part of your life (or even your child’s bedtime routine), but small actions can add up to a big impact on your health and life insurance rates. Here are some areas of your life insurance application that you may be able to change in your favor:

• Smoking: Using tobacco is linked to serious health risks, so smoker’s rates are much more expensive.

• Health: Health issues will tend to make you riskier and more expensive to insure, but taking steps to manage your 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. This could include hobbies such as skydiving or flying a private plane.

• Occupation: The riskier your job, the more you will pay for life insurance.

• Criminal history: DUIs, previous convictions, etc., can raise your rates or even disqualify you from getting life insurance coverage, so stay on the right side of the law (as if you needed another reason).

• Financial history: While your credit score won’t directly impact your rate, your overall credit history probably will, including any bankruptcies reported. Long periods of unemployment may also affect your ability to get affordable coverage.

• Coverage amount: The amount of coverage you need will change your rate. More coverage = higher rates.

• Length of coverage: A shorter life insurance term can offer lower premium rates. Consider how long you need coverage to decide which term length fits best for you.

How Much Life Insurance Do I Need?

How much term life insurance you need depends on your family and financial situation. If loved ones in your life depend on your income, that’s a strong sign that a policy could provide important peace of mind and financial benefits if you were to pass away. Supporting your family’s long-term care costs, paying for education or sharing household bills are all important financial considerations to include when you estimate your coverage needs.

The best way to estimate the right term life insurance coverage amount is to consider your debts, household contributions and future financial plans (e.g., college savings, your contribution toward your and your partner’s retirement) to get a full picture of your financial impact on your loved ones.

A Year’s Worth of Term Life Insurance Costs

To get a sense of what real-world costs look like for a term life policy, step into the lives of these imaginary customers and see how their premiums compare to some of our favorite everyday splurges.

All quotes are for a 20-year, $500,000 policy (unless otherwise stated), with rate estimates accessed January 2025.

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 2024 tax refund of $3,050.

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 1.35 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 in Georgia 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. (Luckily for Amanda, library books are free so she doesn’t even have to slow down her reading habit in order to get insurance coverage!)

December

Not everyone needs a $1 million life insurance policy, but some families do. Andrew lives in Georgia, and 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 term life insurance costs $40.21, less than a tank of gas for the family minivan.

How to Get a More Affordable Term Life Insurance Policy

To a large extent, your life insurance rates will be based on your risk profile, and there’s only so much you can control. That said, there are a few things you can do to try to keep your term life insurance costs down:

• Quitting smoking may qualify you for lower rates after enough time passes and you stay tobacco free.

• Taking care of your health is one of the best ways to keep qualifying for lower rates (not to mention feeling better).

• Driving sober and avoiding high-risk hobbies may help lead to lower rates.

• Simply acting now rather than waiting may wind up saving you in the long run; the younger and healthier you are when you apply for life insurance, the lower the rates you are likely to be offered.

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 help 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 help protect your loved ones’ financial security as much as possible.

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

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

Information provided is general and educational in nature, is not financial advice, and all products or services discussed may not be offered by Fabric by Gerber Life  (“the Company”). The information is not intended to be, and should not be construed as, legal or tax advice. The Company does not provide legal or tax advice. Consult an attorney or tax advisor regarding your specific legal or tax situation. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. The views and opinions of third-party content providers are solely those of the author and not Fabric by Gerber Life.