How Does Age Impact Life Insurance Rates

When it comes to buying life insurance, many factors impact what you pay for coverage. Among them is your age. When insurance companies consider coverage options, they want to factor in the amount of risk you present to them. That means getting to know what your health is, what your overall lifestyle is, and what your age is. Here is why it matters. 

Insurance Companies Estimate Risk 

 

Life insurance policies range from term life to whole life. That means they can be in place for a set number of years or even for the rest of your life. The goal is to choose a policy that fits your needs. Here is how age may play a role. 

In Term Life – If you are in your 30s and purchasing a 20-year life insurance plan, the insurer is likely to see this as a good investment for them. Most people who are relatively healthy live beyond 50. The insurer does not have to worry as much about losing money on the investment. If you are in your 50s and you request a 20-year policy, that may be a bit riskier. Though you still may be able to obtain this coverage, it may cost you more. 

In Whole Life – Whole life insurance policies cost significantly less when a person is younger. There is more time for the underlying investments to grow in value when you are young. Yet, whole life insurance remains available for applicants well into their 40s, in most cases. The older you are, though, the more expensive the coverage is likely to be simple because there are fewer premiums you will make during your lifetime. 

Health Matters More 

 

Age may seem like a big factor in determining if you can obtain life insurance. It does not have to be.  

Most often, insurance companies are more likely to offer competitive rates and longer-term policies to men and women who are healthy, even if they are older. That means you should consider applying for a policy even if you are a bit older now. 

Of course, the sooner you buy life insurance, the better. It can safely provide for your needs long term. And, when you buy at a younger age, you will likely pay less overall than if you wait to make your purchase. Life insurance companies work with many people though, even those in their 50s and early 60s in some cases.