An Insiders Look at Term Life Insurance Rates by Age
Most insurance agents will advise you to get a term life insurance when you’re young. And it’s for a good reason as the cost will never be cheaper as you grow older. Term life insurance price quote.
However, people of different ages have different priorities in life. This affects when they start thinking about buying a life insurance plan. Many individuals that are single, and have just begun a career, may see it unnecessary to get term life insurance because they have no spouse or children.
However, in many cases someone who is single may still require a life insurance policy.
Just because your single you shouldn’t overlook the importance of a life insurance policy.
Aside from that, you should know that term life insurance rates are not calculated solely on your actual age. So how do insurance providers determine term life insurance rates? What is the price you can expect to pay in your 20s, 30s, 40s, and beyond?
This will all be discussed in our article on term life insurance rates by age.
What is Term Life Insurance?
Simply put, its temporary life insurance coverage with a fixed premium for a set amount of years known as contract lengths. Most term life insurance plans come in contract lengths of 10, 15, 20, 25, 30 and even 35 years.
Example of how term life insurance works
You purchase a term life insurance policy with $250,000 worth of death benefit coverage for a period of 10 years . The monthly cost of the term life insurance coverage is $10/month.
The $10 per month is guaranteed to remain that price for exactly 10 years.
Should you pass away due to an unforeseen accident or health related illness, your beneficiary will receive the full $250,000.
The death benefit is guaranteed even if it’s one day into your policy.
After the 10th year you will have the option to continue paying on the coverage but at a much higher rate. Most term life insurance policy’s also have what is called a conversion option.
The conversion option allows you to convert your current term contract to a permanent life insurance policy without any evidence of insurability.
Purchasing a new term life insurance policy will be the most affordable option when a contract expires. However, the rates will be higher as you will be older. In addition to being older you have experienced some health changes that can also have an effect on rates or even insurability.
Additional Life Insurance Options
A second option for life insurance coverage is permanent life insurance. Permanent life insurance also comes with a fixed premium but is guaranteed to remain the same price forever.
The two most popular types of permanent life insurance are:
Whole Life Insurance (Most expensive but builds up cash values)
How Term Life Insurance Rates are Determined
If you think that your actual age is the ultimate measure in deciding term life insurance rates, we should introduce you to “insurance age”. Although your insurance age can be the same as your actual age, it’s not always the case.
If you’ve passed more than six months after your last birthday, your insurance age is often rounded up to the next age with most life insurance companies.
In addition to age, there are many other factors that determine the final cost of what you will pay for your life insurance policy.
your lifestyle, including whether you use tobacco or not
Child term life insurance
your health in general both past and present
your job or hobbies that may increase the risk of injury
your predisposition to genetic illnesses
All of this information is asked during the application process. Most of the time it will be during the medical exam but can also be located on the application especially if you are applying for life insurance without a medical exam .
The underwriter will use this information along with medical exam results to assess your overall insurablity risk to the life insurance company.
Your approved health classification determines the final cost of your life insurance rates.
IMPORTANT NOTE:The less of a risk you are to the life insurance company, the cheaper the life insurance policy will cost.
As you can see, there are several factors that play a roll on your actual rates and will vary greatly from person to person.
Term Life Insurance Rates By Age
1. Age 20 – 30
Many individuals in their 20s don’t think about getting a term life insurance for several reasons:
they have other priorities including finishing college, landing a job and finding a life partner
often interested in investing their income into something else, something less bleak than death
usually, no one is dependent on them just yet
However, as we mentioned earlier in this article, there are several reason why a young single person would require a life insurance policy. Most importantly…its going to be much more cheaper now than later.
Sample 10 Year Term Life Insurance Rates for ages 20-29
Towards the end of your 20s and into your 30s, people start to really consider purchasing a life insurance policy. This is because the income has become more and more stable, people start having children, and their priorities have shifted.
Sample 10 Year Term Life Insurance Rates for ages 30-39
2. Age 40 – 50
In your 40s, people start taking life insurance more seriously. Some health issues that were unimaginable in your 20s and 30s may have appear. This may include elevated cholesterol, high blood pressure and even some weight gain.
What’s more, they start sending children to college. A lot of people who haven’t bought a life insurance policy in their 20s and 30s buy it now. And it’s a recommended.
Ages 40 – 50 often require life insurance coverage the most as their need for financial protection is usually at its highest.
Sample 10 Year Term Life Insurance Rates for ages 40-49
Many people in their early to late 50s have grown up children who don’t depend on them anymore. That’s why the priorities of buying a life insurance plan in this age bracket shift from protecting the children to protecting the spouse.
As expected, the term life insurance rates for those in their 40s and 50s are higher but still very affordable.
Sample 10 Year Term Life Insurance Rates for ages 50-59
3. Age 60 – 70
People in the 60s and 70s normally don’t have to worry about their children anymore. They’re usually adult by now and pay for their insurance themselves. So for many people, getting term life insurance policy with a large death benefit is usually not needed.
However, for someone with a dependent spouse or children, the smart move is to purchase a plan. It may offer additional peace of mind about the funeral cost and other end-of-life expenses.
One advantage of term life insurance is its lower rates than permanent life insurance. Also, the terms for individuals in their 60’s and 70’s don’t differ much. However, it can come with a risk of outliving the term and the fear of not being able to re-qualify afterward.
At age 60 the longest available term length is a 25 year plan
At age 70 the longest available term length is a 20 year plan
At age 78 the longest available term length is a 15 year plan
At age 80 is the cutoff for a 10 year term life insurance plan
Sample 10 Year Term Life Insurance Rates for ages 60-69
Sample 10 Year Term Life Insurance Rates for ages 70-79
So take all these into consideration before deciding on the type of life insurance you should get. Term life insurance rates for people at this age are much more higher than that of the 20-50 age group.
Sample No Exam Term Life Insurance Rates
Looking to pass on the medical exam? Well if you’re between the ages of 18-65 and need less than $500,000 in coverage you’re in luck.
No medical exam underwriting or simplified underwriting is becoming the preferred method of applying for life insurance coverage.
We even have a couple companies that are offering preferred rates that are very competitively priced to coverage that would require an exam.
Top 10 Reasons to Buy Term Life Insurance
#1. It’s affordable
There’s no doubt about it. In comparison to the other types of life insurance coverage, term will always be the most affordable option.
#2. Income Replacement
For families with young children, many experts will say you should have at least 10 to 12x your annual income. This amount of coverage will allow your loved ones to continue living their lifestyle without any unexpected financial burdens.
#3. Mortgage Protection
Many reasons why term life insurance coverage is for a spouse to continue with mortgage payments after the loss of a loved one. This allows your spouse or significant other to continue with payments towards the mortgage without fear of loosing their home.
#4. College Tuition
For many parents, helping their children with a college education is an important goal. A term life insurance policy can provide the funds to help pay for school tuition.
Whether its financial debt or medical debt not covered by your health insurance provider, a term life insurance policy can provide funds to cover those debts. This can protect your spouse from creditors looking to collect on outstanding debts.
#6 Business Insurance
For business owners needing life insurance coverage for a key-man , buy sell agreement or to secure a SBA or other financial loan , term life insurance is often the preferred choice. This is because of the large amount of coverage that can be obtained at a low price.
#7 Living Benefits
Have you ever heard of the term “life insurance you can use while your alive”?
New innovated features are always being added to life insurance policies. One of these newer features are known as accelerated death benefits or living benefits.
Living benefits are policy riders that will allow for the policyholder to access their death benefit due to an unexpected illness such as critical or chronic illness as well as terminal. In other words you do not need to die for your life insurance coverage to be used.
Living benefits term life insurance are becoming a very popular coverage option as they competitively priced in comparison to a term life insurance policy without the riders.
Protective life insurance company
#8 Charitable Donation
A term life insurance policy is a great way to leave a very sizable donation to a school, church or other organization you deeply care about. This is known as a charitable giving life insurance policy. You simply purchase the life insurance coverage, pay the premiums and name the organization at the primary beneficiary.
#9 Easy Change to Permanent Coverage
Most term life insurance policy’s offer what is called a conversion option . A conversion option allows you to take your term insurance and convert it into permanent coverage. The permanent coverage is usually a universal life insurance policy or whole life insurance policy depending on what the insurance company and their available products.
This is a great feature have especially if you don’t need something permanent at the moment but possible later.
#10 Peace of Mind
Simply put, a term life insurance policy can provide peace of mind knowing that your beneficiaries are going to be financially taken care.
How To Apply for a Term Life Insurance
After you have determined a dollar amount figure, you will need to begin shopping for the best term life insurance rates. This can be hard to do on your own especially if you have had a prior or current medical concerns.
Even then, medical issues are not the only deciding factor on final rates. Its always best to consult with an actual life insurance agent to make sure you are applying with the best company based on your criteria.
We Top Quote Life Insurance will work with you to make sure you apply with the a company thats going to give you the best price based on your own unique criteria.
Do your research on the different companies and coverage options they offer. Here is a recent article we did on the top life insurance companies in the U.S.
In this article, we have seen some examples of term life insurance rates by age.
If you have someone who depends on you, consider a term life insurance policy. It’s the most affordable life insurance policy and can provide a great deal of financial protect regardless of what age you are.
Although age plays a factor, term life insurance rates will vary from one person to another – even when they have the same insurance age. As we’ve seen above, many other factors play a role in determining the costs.
So you should never decide on a policy based on the term life insurance rates that your relatives or friends have. Always compare quotes and benefits from multiple life insurance providers to ensure you get the most suitable one for your needs. And remember that the sooner you purchase, the better.
Curious on how much you can expect to pay for a life insurance?
Simply contact us for a quote. Or for an instant quote, use the quote form located on every page of Top Quote Life Insurance. You will instantly get quotes from multiple A.M. BEST (A) rated life insurance companies. If you find an offer that you like, you can apply in one simple click.
Again, if you need personalized help in choosing the best life insurance policy for you, please don’t hesitate to contact us. Our team of experts will reply to your inquiries as soon as possible.