Some say age is just a number, but age influences a lot of matters such as when you can vote, when you can drive and how much you pay for life insurance. Typically, life insurance premiums are not the first topic to come to mind regarding age related milestones – death is a far less appealing subject than driving your first car. Even so, when purchasing life insurance, it’s good to know how maturity will affect your premium.
When you opt for term life insurance you are determining how long you want your policy valid for. This length of time will vary from 5 to 35 years. This is unlike whole life insurance which is, as your probably guessed, good for the insured’s whole life.
Since the policy is no longer valid once the term expires, you must consider your age when selecting life insurance. For instance, if you choose a 25 year policy when you’re 25, you’re only going to be covered until the age of 50. If the policy expires and you’re still alive and kicking, you no longer have coverage. Of course, Insurance companies fancy this scenario, which contributes to about 90 percent of all term policies never being paid out.
Life insurance policies (click here to learn more) are not like those cheap gloves you buy at the dollar store – one size does not fit all. Since no two individuals are alike, no two policy holders will pay the same premium. The insurance industry is based on crunching numbers and assessing risk. How much you pay depends on several factors including your health, your lifestyle, your job, the type of insurance you have and of course, your age.
It shouldn’t come as much of a surprise that the younger you are, the lower your rate will be. Younger people tend to be healthier and therefore, less likely to take a ride in a hearse. Also, life insurance will get more expensive as you age because you are closer to dying. This leaves the insurance company with less time to collect the premium to pay the benefit.
To prove how leery insurance companies are of those over 65, it’s a good idea to do online policy comparisons. All you have to do it enter your zip code and basic information onto the website to obtain quotes from oodles of companies. Start by entering a youthful age, followed by a number that pegs you as a senior citizen. You will quickly see the results of age discrepancy pop up on your screen. For instance, take a look at the example displayed in the following table.
This leads us to the best way to do your homework before committing to a policy. Since every insurance company has a slightly different formula for creating a quote, it’s wise to shop around. Thanks to modern technology, you don’t have to go door to door – or even website to website – to get the best deal. Simply enter your basic information on a single website and get quotes from all the companies. It’s that easy.