Why younger applicants pay less for their life insurance.
In general, the younger you are, the cheaper your life insurance will be. This is why people are encouraged to secure life insurance coverage early in life. But why exactly does age matter so much when it comes to life insurance? Here’s what you need to know.
Determining Your Insurance Age
When you are shopping for life insurance, it’s important to know your life insurance age so you can accurately compare policies. When discussing life insurance, your insurance age is whichever age you are closest to. For instance, if you are 40 years and 6 months old, then you are closer to age 41. So, insurers will consider you 41 in their insurance calculations.
Why Younger Equals Lower Rates
Term life insurance is particularly time-sensitive when determining your rates. This is because term life insurance only covers you for a specific period of time and, the closer your coverage expiration date is to your life expectancy, the more it will cost you. When you are young, your life expectancy is so far away that you are considered very low risk to insure. As a result, you are offered cheaper rates. The older you are, the closer you are to your life expectancy. This means a higher risk of death during your coverage period and, therefore, higher premiums.
Age and Health
Another reason why younger individuals typically pay less for life insurance is because they tend to be healthier than older applicants. Generally, the older you get, the more likely you are to develop health conditions such as:
- Heart Disease
- High Blood Pressure
- High Cholesterol
- Chronic Obtrusive Pulmonary Disease (COPD)
- Kidney Disease
When you have serious medical conditions, you are more likely to develop life-threatening complications and have a shorter life expectancy. Naturally, this makes you higher-risk to insure. While not all older individuals have medical conditions, insurers will consider them more likely to develop them than a younger applicant. As such, older individuals will be charged more for their life insurance coverage.
This is how age affects your life insurance costs. Do you need help with your life insurance needs? If so, then contact the experts at Duane Weber Insurance, Inc. in Kent, Washington. We are ready to assist you with all your coverage needs today.