How Age Affects Life Insurance Rates : Most people have a misconception that life insurance can be purchased at any age at the same rate. Unfortunately, that is not true because the life insurance premium rate depends on several factors.
Now a query may stand up in your mind: How age affects life insurance rate? Typically, age plays a crucial role in estimating the insurance premium rate.
For example, your premium amount can be increased from around 8% to 10% for every year of your age. For that, you will get as low as 5% of the premium when you are 40 years old annually and 12% for ages over 50.
To get in-depth information about life insurance premium rates over age, keep reading the entire context.
How Actually Life Insurance Rate Works?
Life insurance is usually designed to bear the expense of your funeral or final costs after anyone’s death. So, insurance will require depositing premiums to get good coverage that will be enough to cover the final expense.
According to the insurance policy terms, insurers have to pay these premiums monthly, semi-annually, or quarterly. Typically, life insurance companies usually use an actuarial table to determine insurance rates. This table estimates the life expectancy of people at different ages and stages.
Apart from that, it calculates people’s probability of survival at a certain age. That’s why the insurance premium rates will differ according to individual age. Basically, the lower your age, the higher your chance of getting life insurance with less price and more policies.
It doesn’t mean you can’t apply for life insurance once you’re old. You can even purchase coverage that serves life insurance over 90 to cover your funeral expenses and support your family.
How Age Affects Life Insurance Rates?
The premium rate of life insurance depends on the purchase time and policy duration. At this stage, age is considered a crucial factor in determining the premium rates. This is because the more senior you are, the higher your chance of dying.
However, the premium rate can also differ depending on some other factors, including the insurer’s gender. The reason is that females get higher age than males. For that, insurance companies use an actuarial table to determine someone’s dying age.
In general, the premium rate is increased on average by around 8% to 10% for every year of age. Besides, in the 40s, the premium rates will increase by 5% to 8% every year.
In contrast, if you are over 50 years old, the premium increase rates will be 9% to 12% each year. For your convenience, below, we have made a table with the approximate life insurance rates by age based on a $500,000, 20-year term life insurance policy.
| Age | Average Rate For Men (Annual) | Average Rate For Women (Annual) |
| 30 | $224 | $189 |
| 40 | $336 | $284 |
| 50 | $826 | $645 |
| 60 | $2,362 | $1,670 |
| 70 | $9,297 | $8,235 |
What Other Factors Affect Life Insurance Rates?
Apart from age, some other factors, including gender, smoking, health, and lifestyle, can affect your life insurance rates. Here we have discussed some significant factors affecting your life insurance rates.
Gender
After age, gender greatly affects estimating the life insurance rates. According to the United States Census Bureau, females live nearly five years more than males. As life insurance premiums estimate depending on the insurers’ age, females are more likely to get lower premium rates.
In that case, males are considered to be able to pay less extended period premiums than females, resulting in slightly higher premium rates.
Smoking
Smoking leads anyone to serious health issues, even death. So, it can be a bad point for those who seek purchasing life insurance. This is because smoking can reduce anyone’s life expectancy. For that, smokers will qualify for life insurance with a higher premium rate.
In some cases, smokers need to pay more than double the premium rates compared to non-smokers. That’s why you should kick the smoking habit if you are a smoker to get low premium rates on life insurance.
Health Condition
You will need to undergo a medical test when purchasing life insurance. Your height, weight, blood pressure, cholesterol, and other important metrics will be tested in the medical exam.
In some cases, insurance companies require checking electrocardiograms to examine your heart condition. All the tests are performed to check whether you can pay the regular premiums until a certain age.
Lifestyles
Lifestyle is another aspect that can affect life insurance rates greatly. If you are involved in risky activities like car racing or mountain climbing, you will get a higher premium rate for life insurance.
These activities are so risky that your life can fall into danger at any time. For that, insurance carriers set a higher premium rate for life insurance who engage in dangerous activities like fishing, mining, or transportation.
Family Medical History
Apart from your medical condition, your family medical history can lead to getting a higher premium on life insurance. In that case, if your family has any severe medical history, such as cancer, stroke, or other serious illness, there is a chance that you may experience such issues. For that, insurance companies are concerned about the insurers’ premature death.
Driving Record
Not all, but some insurance companies consider driving records during purchasing life insurance. Even in some cases, they verify the records with the Department of Motor Vehicles to check whether insurers are related to traffic laws violation. In that case, if you are engaged in any traffic violation, you will be required to pay a high premium on life insurance.
What Is The Right Age To Purchase Life Insurance?
In general, the best age to buy life insurance is when you are relatively younger. However, sometimes it can be challenging to purchase life insurance due to financial crises, especially when you depend on others. For that, professionals advise purchasing life insurance whenever anyone begins to earn.
Since life insurance premium rates are estimated by the insurers’ age, purchasing life insurance at a young age will be better. This is because younger people are less at risk of passing away during the period of insurance time.
Purchasing life insurance at an early age will help you to get fewer premium rates which will be easy for you to pay. This way, you can deposit a good amount for your belongings to spend on your funeral or final expense.
Some Frequently Asked Questions About Life Insurance Rates Over Age
It is common to perplex Different queries when someone is looking for life insurance. For that, we have outlined some commonly asked questions with proper answers below. Check out the section for any query you are looking for; you may explore your answer here.
1. Is Any Life Insurance Company Available Where Premium Rates Won’t Increase Over Age?
Yes, some life companies you will find that offer fixed-rate life insurance for all members. This type of company usually does not discriminate against insurers in age, gender, and health conditions. However, you will get limited coverage from the insurance companies that offer a fixed premium rate on life insurance policies.
2. How To Reduce Life Insurance Premium Rates?
As we said earlier, the life insurance premium rate usually depends on several factors. In that case, by following some factors, you can reduce your life insurance premium rates: Below, we have pointed out some such factors that you should follow.
- Choose the right sum assured
- Purchase life insurance at a young age
- Compare different policies before buying
- Avoid choosing add-ons with your policy
- Buy life insurance online, which is relatively less costly
3. Which Types Of Life Insurance Are There?
You will find five key types of life insurance policies that are offered by most insurance carriers. These are term life insurance, universal life insurance, whole life insurance, variable life insurance, and final expense life insurance. Without term life insurance, all of these are permanent life insurance.
Conclusion
Hopefully, you have gathered enough information on how age affects life insurance rates, after reading the entire context. In general, premium rates and ages are related proportionately in life insurance.
In that case, if you’re older, you have to pay higher premium rates for life insurance. On the other hand, the younger you are, the higher your chances of getting lower premium rates.
Apart from age, some other factors also affect life insurance premium rates. However, if you are unaware of those, check the section above to get a proper idea. This will help you purchase life insurance easily.
In that case, if you’re older, you have to pay higher premium rates for life insurance. On the other hand, the younger you are, the higher your chances of getting lower premium rates.
Apart from age, some other factors also affect life insurance premium rates. However, if you are unaware of those, check the section above to get a proper idea. This will help you purchase life insurance easily.
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How Age Affects Life Insurance Rates
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