Life Insurance Rates

Life Insurance Rates by Age

Life insurance isn’t something many people want to think about, but it is very important to have available. What happens if you die suddenly and do not have a policy in place to cover the many costs of a funeral? How will your family be provided for when you are gone? Even the young are not immune to sudden death, making life insurance an important consideration for people at any age.

Types of life insurance

There are many different types of life insurance policy. They are designed to offer different levels of service and coverage, depending on the needs of the customer. However, it can be tough to figure out the best for your personal situation. Here are the three most common forms of life insurance:

Term life insurance – This is a policy that lasts for a certain period of time or a term. Coverage will typically allow a policyholder to lock in the rate at their current age and health status for 5 to 35 years.  Once the term has expired, the rate is usually higher due to the Individual’s older age. Term life insurance can be a great way to cover a specific need such as a loan or the years while your children are growing up. Term life insurance is a lower cost option, but it does not provide any cash value like some other insurance policies.

Whole life insurance – This coverage is similar to term life insurance, but it is not set to a specific term. In addition, whole life insurance will provide you with a savings aspect that can be very useful for paying any number of bills while you are still alive. This way, you can gain a financial benefit from the policy long before you die. Whole life insurance offers a way to keep your family financially safe after you die by replacing your Income and covering final medical and funeral costs.

Universal life insurance – This is a form of insurance that covers the standard death benefits but also provides some money that you can access while you’re still alive.  In addition, universal life insurance can act like a savings account, allowing your premiums to grow like savings over time, so you can pull value from the policy to pay other expenses. Much like pulling equity out of a house, you can pull equity out of a universal life insurance policy. In this way, you can reap the benefits of your life insurance in life as well as in death.  Typically, universal life will have a lower cost that whole life because of fewer guarantees.

How does age affect life insurance?

Age has a great effect on life insurance policy premiums. As you would expect, the older the policyholder, the more expensive the policy will cost on a monthly basis. When someone is aging and nearing the end of their life, the policy is more likely to be needed and therefore the rate will be much higher than that of someone who is young and less likely to die in the near future.

The jump in price truly depends on a wide variety of factors. Most insurance companies consider age, smoking status, exercise level, medical records, and type of employment when deciding on the premium cost. Many companies will also keep costs a bit lower if you have had the policy for many years, as an incentive to stay with them and not switch to another insurance company.

How much does life insurance cost?

There is a wide variety of cost for life insurance policies. Based on the statistics from Term Life 2 Go, someone in their 20’s or 30’s can expect to pay about $10 per month for $250,000 worth of coverage on a 10-year policy. That same policy could cost as much as $750 per month for someone in their 80’s. The website provides statistics on all age ranges and different types of coverage levels, as well.

These are all estimate, of course, so they are not to be considered guaranteed rates. Many factors go into the pricing of life insurance policies.

The importance of life insurance

No one knows when they will die, and age is not the only contributing factor to death. Any number of things could happen to take the life of a person much younger than when they would expect to die. Fortunately, life insurance policies are available to all adults and can provide peace of mind that family will be taken care of financially no matter what unexpected events may occur. Speak with an insurance agent about the different forms of life insurance to discover the type that fits your needs.

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