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The Hard Fact
One day, each of us will die. It’s why life insurance is so important to the people who depend on our incomes.
One of the main ways insurance companies figure out the cost of life insurance is by estimating the rate at which people die. This is known as “mortality.” There’s a predictable mortality pattern based on age and health factors; calculations are based on this pattern. This is part of a process known as underwriting life insurance.
What Do My Age and Health Have to Do With It?
Plenty! In general, the younger and healthier you are, the less you’ll pay for your life insurance policy. As we age, there’s more risk that we’ll become ill or, quite frankly, die. Good health also includes being a healthy weight—another incentive for many of us to get or stay fit.
If you are in your younger years, consider purchasing a life insurance policy now, instead of postponing it. It could save you money. And if you’re healthy now, consider the possibility of getting a disease later on that could increase the amount you have to pay for life insurance, known as premiums, even more—or even make you uninsurable—later in life.
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To Underwrite or Not to Underwrite
Not all life insurance policies require underwriting.
If your policy is the type that does not require underwriting...
... like life insurance you get through work, it may cost more. The company may make more assumptions, grouping you with a larger pool of people, and taking on more risk.
If your policy does require underwriting...
... you may need a medical exam, in addition to answering several questions. But your cost may be less if you’re younger and also in good health. The cost is based on you and a much smaller group of people like you, so mortality is generally more predictable.
Premium Payment Types Can Impact the Cost of Your Policy
Some life insurance policies have premiums that are a specific amount, paid at a specific frequency, like monthly or annually; these are called non-flexible premiums. Other life insurance policies have flexible premiums; these are paid in varying amounts at different times. The type of premiums you pay for your policy, non-flexible or flexible, can play a role in the cost of your policy.
If you decide to pay your premiums once a year, they will typically be less than if you paid monthly or quarterly.
If your policy allows for flexible premiums, it means that you can change the amount of premium you pay, within limits, and when you pay. The policy will stay active, known as “in force,” as long as its value is enough to pay its costs and expenses.
Explore Our Policies
With a variety of life insurance policies to choose from, you can find one or a combination of policies to help meet your protection needs while also fitting into your budget. Explore the different types of life insurance policies available to you.
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Investment and Insurance Products:
Not Insured by FDIC, NCUSIF, or Any Federal Government Agency. May Lose Value.
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