As with any insurance, life insurance cost is based on the amount of risk that you pose to an insurance company. Depending on your life expectancy, and the type of policy that you select to purchase, costs can range from very low to extremely high.
The cheapest type of policy that you can purchase is an accidental death life insurance policy. The cost here is very low because the likelihood of an accident resulting in death is low. The next cheapest type of life insurance is called term life insurance. Here you only pay once, and when your policy expires you cannot renew it. Term life insurance policies range from around $50,000 to $10 million. If you choose a permanent life insurance policy, the cost may be higher but it will be a fixed price. In this case, you may pay for your policy for a period of time and then meet your quota. Permanent life insurance can range anywhere from around $10,000 to millions of dollars
Your specific policy depends on a complicated mathematical model that is followed by an actuary. A combination of many variables equals the cost of your life insurance policy.
The first variable is your current age. If you are younger, your life insurance policy will cost less because you are less likely to die suddenly. There is an equation that leads to a value, called the force of mortality, that specifically determines how likely you are to die if you are a certain age.
Another variable that determines the cost of your life insurance policy is how long you want the policy to last for. Longer term policies, or permanent policies, cost more. The longer your policy, the more likely you are to die under the time period covered by insurance. Long policies are higher risk and therefore cost more.
If you are a man, your life insurance policy will be more expensive than if you were a woman. This is because men have a shorter life expectancy than women.
Miscellaneous variables include whether you are or are not a smoker, the amount of risk your job poses to your health, what socio-economic class you are in, and if you are or are not disabled. Actuaries also include the likelihood of certain events occurring during the time period that you are insured for when they create your policy.