How Does Age Affect Life Insurance?

Many believe they don't need life insurance until they have spouses, families and houses, but the best age to get life insurance may be much earlier than that.

Life insurance isn't about immediate need; rather, it's about planning for your loved one's financial future. You'll hear that the right time to buy life insurance is when you're young, but why exactly is that? One major factor: your age.  

Why Does Age Matter?

Age is a primary determinant in life insurance rates, since the greater your age the greater your risk of death. In other words, for the same term life policy, a 48-year old will almost always pay more than a 32-year old, even if they are in equally excellent health.

In fact, you can expect, on average, to pay 8-10% more for every year that you age with that number increasing to 9-12% more per year by your 50s*. Of course, for many policies (including term life), once you secure your coverage your rates won't change for the life of the policy. They are locked in regardless of future changes to

your health, lifestyle or age, which is why buying young is so often emphasized. That simple act of buying early could save you money in the long run.

Aside from the financial benefits, age may also play a role in how quickly and smoothly the application process goes. Older applicants may be required to take additional tests like an EKG and, in some cases, cognitive testing for dementia. These tests may require additional effort from you and slow down the application process. It is also possible that as you get older you will have more health conditions to report. In many cases, physical and mental health conditions require a statement from your primary care physician.

Can I be approved for life insurance later in life?

Age is generally not a disqualifying factor for life insurance. Many carriers will insure you well into your 80s, However, regardless of what type of life insurance you're trying to secure - term or permanent, you can expect that your rates may go up for every year you wait.

Are there other options for older individuals?

The good news is that there are several other policies available that may be a better fit for you if you are of an older age. These types of policies may cover final expenses or accidental death. In the case of Guaranteed Issue Whole Life Insurance, for example, you don't have to take a medical exam and may be covered for up to $25,000. The intent of this type of policy is to protect your loved ones from the burden of paying for final expenses. For Accidental Death Insurance, age is not a factor, and you also don't have to take a medical exam. However, you will only be covered for a death occurring as the result of an accident.

Age is an indisputable factor when it comes to securing many types of life insurance. For young people, who are healthy and beginning their families, this may be when you have the most to protect with life insurance and could pay the least. For a more detailed look at how age may affect your life insurance rates, request a quote or give us a call to discuss your situation with a licensed agent at 800-294-4544.

* http://www.investopedia.com/articles/personal-finance/022615/how-age-affects-life-insurance-rates.asp

**https://wonder.cdc.gov/controller/datarequest/ D76;jsessionid=690F2BAB74A7F4E2BFF F62526D8D3EDD