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Apr 15, 20225 min

Life Insurance Cost Comparisons

Determining the average cost of life insurance is no easy feat, given all the variables involved. Age, sex, and health all play a role. Therefore, it’s safe to say that life insurance coverage costs vary–it can be as little as $15 per month for a term policy or around $80 if you’re opting for permanent coverage. With these figures in mind, here are five things that cost the same or more as a monthly life insurance policy.

5 Things That Cost the Same or More Than Life Insurance?

1. Checking account

Pretty much everyone has a checking account. And yes, it’s possible to get one without paying a dime, but there are options charging a monthly fee too. On average, checking accounts cost between absolutely nothing and $25 per month. If you currently pay for your checking account–and especially if it’s on the higher end of the spectrum–it could cost more than life insurance. So why not that money to alternative use with a life insurance policy that protects your loved ones should the worst happen to you?

2. 401K

With a 401(k) account, you don’t necessarily “spend” any of your money as you’re saving it for the future. Yet most 401(k)s charge a 1% fee that can accumulate over time. So if you end up saving $625 per month for 30 years, you’ll end up spending $105,306.66 in fees with no return in your 401(k)–and that doesn’t even include the taxes you’ll need to pay. Therefore, a life insurance policy can cost significantly less each month as you don’t pay any fees on top of the monthly premium.

3. Research and data subscriptions on a brokerage account

The stock market is still the most popular way for Americans to invest, but the taxes and dividends you pay over time can really leave a hole in your pocket. Many investors focus on the market performance when they should be thinking about the after-tax return. And when you factor dividends into account, a brokerage account can cost significantly more than a life insurance policy, which allows you to access cash tax-free and gives you a death benefit.

4. Gym subscription

Pumping that iron and making sure you attend the latest spinning class is all well and good, but it ain’t cheap. The average US gym subscription is $50, so you’ll need to pay the cost to have that flat stomach. Add in fees for a personal trainer, and you’re looking at spending hundreds per month. Of course, your health is essential, especially if you want a low-costing life insurance policy. But life insurance coverage can cost just as much (and if not less) than a gym subscription.

5. Subscription-based services

Eighteen dollars a month for Netflix might not seem like much in isolation. But when you add all the typical subscription services that Americans subscribe to, it can cost just as much as the average permanent life insurance policy. Netflix, combined with Spotify, Amazon Prime, Blue Apron, Birchbox, Dollar Shave Club, GoDaddy, Playstation Now, iCloud, Fitbit, certainly adds up. The average subscription spend of Americans is around $80 each month. For that same price, you could get a perm life insurance policy that lets you build wealth you could build instead.

Choosing a life insurance policy


The amount you pay for a life insurance policy depends on the type of coverage you get and how much you insure yourself for. A term policy is the cheapest on the market and provides a death benefit to your beneficiaries should you pass away during the time you’re covered. Term policies usually last anywhere between 5 and 30 years, though once they expire, you’ll need to renew the policy if you wish to continue.

Just bear in mind that renewal rates are charged at your age when you renew and not when you got your first term coverage. So if you were 25 when you took out a policy and 55 when renewing, you’d pay considerably more (sometimes up to three times the amount) as you’d be older and life insurance premiums increase with age.

Therefore, a term policy is the cheapest in the short term–and can cost as little as $15 per month–but the price will add up considerably if you plan on keeping it throughout the duration of your life. You only get a death benefit with a term policy, too. There are no extras.


The premiums associated with permanent life insurance cost more than a term policy, and you can expect to pay higher payments than $15 per month. However, the premiums stay the same throughout the policy. That means you’ll pay the same each month at 60 as you did at 30. This makes a perm policy better value for money in the long term, plus it comes with other benefits.

With a permanent policy, you can build wealth while you’re still alive and use the coverage as a form of savings account. This is possible thanks to the cash-value element, which grows your wealth while you pay into your premiums.

Cash value is a game-changer, and it won’t cost you anything in tax when you withdraw the money accrued. Accessing the cash value sees you taking out a personal loan at 0% to yourself. And because you can’t pay yourself tax, the money you make is entirely tax-free. Then, when you pass away, the death benefit repays the loan, with the leftover amount going to your beneficiary.

In conclusion: life insurance isn’t as expensive as you think

You probably thought that life insurance was costly outgoing, and the only benefit comes when you die. It turns out that life insurance isn’t as expensive as you think and costs the same or less than other financial products and even your favorite monthly subscriptions. Even when it does cost a little more, you get benefits like wealth accumulation while you’re still alive. Add all of these components together, and you’ve got yourself a smart wealth-building tool that doesn’t cost an arm and a leg and is a savvy form of investment.

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