How much is a $500,000 life insurance policy?
Learn how much a $500,000 term life insurance policy will cost, and ask these questions to determine if it's the right amount of coverage for you.
While we would never call you average, we thought you might want to know that, according to a recent Georgetown University study, the average American without a high school diploma earns nearly $1 million in their lifetime. As you would probably guess, those with additional education earn more. All of which is to say that, while a half-million dollars might sound like a lot — and it is — it’s a less imposing figure when considered over the course of your lifetime.
Which brings us to life insurance. When you’re buying life insurance, you need to be mindful of choosing a policy amount that covers more than end-of-life expenses (like burial and a funeral). You also need to consider decades of expenses, if you were to pass away suddenly. These expenses might include things like mortgage payments, childcare, health care costs, and of course, education needs that, like we said earlier, will pay off for your loved ones down the line.
But how much does $500,000 worth of coverage cost? And is a $500,000 life insurance policy enough coverage? As we often say, life insurance is one of those things where more isn’t necessarily better. That’s why we’ve put together this guide with tips for determining how much coverage is right for you. And if it turns out a $500,000 life insurance policy makes sense, we’ll also let you know how you can buy a policy and what else you might need to consider. Let’s get to it, shall we?
In this article:
How much life insurance do I need?
Before getting into the price, it’s worth asking who actually needs a $500,000 policy. A common rule of thumb is to have coverage that’s 5 to 10 times your annual salary. That would suggest that a $500,000 policy could be right for someone who earns between $50,000 and $100,000 a year. The reason for the broad range is that your exact policy needs depend on the age and quantity of your dependents, as well as other factors, like what debts you have and your partner’s income.
Nonetheless, for many people, the rule of thumb is a useful starting point. If you’re the type who likes your life insurance needs a bit more personalized to you (most people do), you can also use an online life insurance calculator. It’ll calculate your face amount and term length needs based on your family structure and financial situation.
What does a $500,000 life insurance policy cost?
Most things that are worth $500,000 cost $500,000, but that’s not the case with term life insurance. As for what does a $500,000 insurance policy cost, there are two definitive answers to the question: The first is, “It depends, but it’s easy to find out.” The second: “a lot less than you probably think.”
The easiest way to get an idea of how much a coverage amount of $500,000 will cost is to use a free online quote tool. Per that quote tool, a healthy 35-year-old woman can buy a 20-year, $500,000 Haven Term policy for around $20 per month.
The price you pay for life insurance is affected by several different factors, some of which you can’t control (like your age), and some of which you can. Three key factors are your age, your health, and the length of the term:
The younger you are, the less you’ll pay for life insurance, which is a strong argument for getting it sooner, rather than later. The price of a policy goes up for every year that your age increases. For example, a man in excellent health, non-smoker, looking for a 20-year, $500,000 policy:
- If he’s 35, he’ll pay around $23 a month
- If he’s 45, he’ll pay approximately $56 a month.
The bottom line is… the better your health, the less you pay. Take the example of a 35-year-old woman looking for a 20-year, $500,000 policy:
- With excellent health, she pays around $20 a month.
- With average health, she pays approximately $44 per month
Smoking also negatively impacts your life insurance rates. If that same woman smokes:
- With good health, she pays around $78 a month
- With average health, she pays approximately $105 a month
The longer you want coverage for, the more it costs. A 35-year man in excellent health, non-smoker, looking for $500,000 of coverage will pay:
- About $16 a month for a 10-year term
- Approximately $17 a month for a 15-year term
- Around $23 a month for a 20-year term (a popular term length for our mid-thirties to early-forties customers)
- Approximately $41 a month for a 30-year term
So does this mean you should get a 10-year policy instead of a 20-year policy and save yourself some cash? Almost certainly not. The length of your term should be based on the amount of time your dependents will need coverage. If you have young children and want to make sure they’re looked after financially if you die unexpectedly, that means you’ll need a longer term length than if you just have a few lingering debts that you expect to pay off in the next ten years.
Additionally, this is when the discussion of term versus whole life insurance comes into consideration. Permanent policies (like whole and universal life) offer coverage that lasts a lifetime as well as a cash value component that can grow over time. However, these policies can be cost-prohibitive compared to term policies.
The cost of a $500,000 life insurance policy will vary substantially if you’re comparing between term life or whole life policies. For example, a 30-year-old woman in excellent health would pay about $30 per month for a 30-year, $500,000 term life insurance policy issued by our parent company MassMutual. A $500,000 whole life insurance policy for that same woman would be about $411 per month [Source: State Farm].
Quotes for a $500,000 term life insurance policy
|Age||Gender||Health||Face amount||Term length||Premium|
|Source: Haven Life Insurance Agency quotes for the Haven Term policy|
How do I buy a $500,000 policy?
As with any insurance coverage, the process of getting a $500,000 term life insurance policy begins with getting a quote and then filling out an application, both of which you can do online with forward-thinking life insurance agencies like Haven Life.
Just know that you will likely pay less for a policy that is medically underwritten, which means that the insurer is going to look at factors like your lifestyle, health, and medical history to determine eligibility and pricing. For many people, medically underwritten policies are more affordable because pricing is based on your health and other known factors so the insurer is taking on less risk from the lack of unknowns. For this type of policy, you will usually need to take a medical exam to finalize coverage, but there are some situations where you may qualify for a no medical exam buying experience. Once an application is submitted, you will know whether or not a medical exam is needed. [Please keep in mind that payment of a policy’s benefits may depend on the truthfulness of answers provided in the application.]
If you need to take a medical exam to finalize your rate and coverage, it takes about 20 minutes and can be scheduled at a time and place of your choosing. Often, you can get some amount of temporary coverage while you wait to complete your exam and get a final decision.
What customers say about their application experience
Sep 9, 2020
Quick and simple Approval
Both my husband and I got term life from Haven life. We recently had a baby girl and we wanted to make sure she’s protected financially if something were to happen to us. He got his first then i got mine after seeing how quick and simple the process was. We are both healthy adults in our late 20s so it was fairly simple and easy to get approved. The price is fair. Term life provides peace of mind for trajedy as we continue to build our wealth. We plan to be self insured when our term expires. I would recommend this company.
–Rachelieread more at
Jul 23, 2020
Piece of mind...
Everything to acquire the piece of mind that my family is taken care of because of something I did over a very short period of time was well worth it. From answering the pre-qualification questions online to attending the medical exam in town, I've gotten to work with a team of really nice professionals.
–Carltonread more at
Jul 22, 2020
Positive experience overall
Was fairly easy to complete, but the online form disappeared in the middle so I had to start over. I called with a question regarding another issue with the form and that was resolved quickly.
–LeeAnnread more at
Jul 1, 2020
Adulting In Record Time
Wow! I have life insurance and it only took 15 minutes! The process was simple, quick and painless. Now that’s my type of life insurance! #GoHavenLife...it’s (almost) like my birthday!
–Rachelread more at
Jun 17, 2020
Haven Life company provides a great product, price and website !!!
Haven Life company provides a great rate and a very easy to use process with a simple website to access. This is one of the best websites to use. I highly recommend this company.
–jamesread more at
Is my life insurance coverage dependable?
If you’ve spent even a little time shopping for life insurance, you know that you have a lot of options for life insurance companies. One way to narrow down those options is by consulting ratings from third-party agencies. These agencies analyze an insurance company’s financial strength, and their ability to fulfill their contractual obligations to pay out a policy — and they do so independently, so you can trust their assessments. Typically, you can find a life insurance company’s ratings on its website; you can also check out life insurance reviews from customers.
Finding the right coverage for you
Even though $500,000 sounds like a lot of money, you may well find that you need that much. We find that the average amount of life insurance Haven Life customers purchase is around 20-years and $600,000. The price for a policy will vary according to your individual circumstances, but it’s easy to find out that number, and one of the great things about life insurance is that you don’t get what you pay for – you get more by way of peace of mind.
About Louis Wilson
Louis Wilson is a freelance writer whose work has appeared in a wide array of publications, both online and in print. He often writes about travel, sports, popular culture, men’s fashion and grooming, and more. He lives in Austin, Texas, where he has developed an unbridled passion for breakfast tacos, with his wife and two children.Read more by Louis Wilson
Our editorial policy
Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.
Our editorial policy
Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.
Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.
Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.
Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.
MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.
Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus.html
What our customers are saying
Jan 13, 2021
The application process was very easy.
–customerread more at
Jan 13, 2021
Very affordable, I gathered quotes from 4 different life insurance companies and this was by far the least expensive for the same coverage. Relatively quick and easy process to sign up. Only reservation was that we were originally under the impression that no medical exams are required, but my husband received a message that he would have to get one (we later received a message that he no longer needed one).
–Louie Sread more at
Jan 13, 2021
My only concern was with the company...
My only concern was with the company used (Exam One) to complete my physical examination. The process took too long due to rescheduling and mishandling of my lab specimens. Other than that the process was simple.
–customerread more at
Jan 9, 2021
It’s been great working with you and easy and am happy I find you
–zaymaread more at
Jan 6, 2021
Great Customer Service
Great customer service! Everyone is patient and knowledgeable. They are professional and efficient in processing your policy ASAP. Highly recommended!
–Sharon Pickfordread more at