Posts tagged ‘average price of life insurance’

The Average Price of Life Insurance by State

The average price of life insurance in the United States is $500 per year, but the cost can vary significantly depending on the type of life insurance purchased (whole, universal or term), the age of the insured person and the location where the person lives. Life insurance rates vary between states and can even vary within a state. For instance, it may be more expensive for an individual to get life insurance in the Bronx than it is in Staten Island even though both are boroughs of NYC.

Why Do Prices Differ Between States?

Insurance companies determine rates for any given area using mortality tables. Mortality tables tell insurers how many individuals in a given area and a given age group can be expected to die within a one year period. This information helps companies set rates high enough to cover death benefit claims. The higher the mortality rate, the higher the rates for life insurance in an age group or an area. Insurers do not consider the manner of death, simply the number of people and their ages, that die in a particular area.

Who Has to Lowest Life Insurance Rates?

According to a recent survey, Fairfax County, Va. boasts the highest average life expectancy for males in the United States, with an average life span of 81.1 years for caucasian males, compared to the national average of 75.6 years. Women, however, fair better in Collier Co. Fla. where their average life expectancy is 86. Life insurance rates for women are slightly lower than those for men since American women have an average life expectancy of 80.8 which is 5.2 years longer than men.

Who Has The Highest Life Insurance Rates?

Virginia cannot boast the lowest average life insurance rates since in addition to have the county with the highest life expectancy for men, they also have an area with one of the lowest life expectancies for men. In Petersburg, Va. the life expectancy for men is 66.9 years. Petersburg is at the edge of an area with consistently lower life expectancies. The area runs through West Virginia and continues along the Appalachian Mountains through the deep south and into northern Texas.

Life Insurance Rates for an Area Can Change

At one time, NYC, NY had among the highest life insurance rates in the country. The introduction of anitretroviral drugs for the treatment of HIV and the dramatic decline in homicide rates during the 1990s significantly reduced life insurance rates for the area by raising life expectancies for all groups. A decline in infant mortality rates also contributed to rising life expectancy in NYC. This will not have any effect on life insurance rates of those with policies, but those purchasing new policies will enjoy lower rates.

Life insurance companies do not try to determine why the life expectancy of one area is higher than that of another, they simply use mortality tables to determine life insurance rates for the area. The highest rates are in areas with the lowest life expectancy. Rates across Georgia, Alabama, Mississippi, Louisiana and north Texas are higher than those in other areas of the country because mortality rates are higher. Reasons include smoking, obesity and a lack of medical care, but that is the concern of the government not the insurer.