Why Life Insurance Gets Higher The Older You Get
November 3, 2022
The younger and healthier you are when you purchase a life insurance policy, the less expensive it is. Purchasing a new life insurance policy when you are older will be more expensive.
When applying for life insurance, you might feel confused by how an insurer calculates your premium. Underwriters indeed take a wide range of factors into account, but your premium ultimately comes down to one factor — risk. The older the applicant is, it is highly probable that they have medical conditions. The more medical conditions the applicant has, the higher the risk they are to insure. Therefore, the premium for the coverage will be higher.
Why Life Insurance Gets More Expensive
Learn more about why life insurance gets more expensive as you age — and what you can do about it.
Life Insurance Payouts Become More Likely
Life insurance is about balancing risk. An insurer issues a policy, assuming that you will outlive it, and you buy the policy to ensure peace of mind for your beneficiaries. The average life expectancy in the U.S. is 76.1 years old, so the closer you get to this number, the greater the risk is for an insurer. It will cause your premiums to be higher when you purchase a new policy because a death benefit claim becomes more likely.
Your Health May Be Declining
Even if you’re decades away from the aforementioned life expectancy, you will see higher life insurance premiums the older you get. It is because your health will likely decline as you age, even if you take great care of yourself. Many insurers maintain specific life insurance requirements regarding health and wellness. Underwriting rules are based on height, weight, and other health criteria. Older applicants are more likely to have more health issues and see higher premiums.
Employer-Sponsored Coverage May End
For most people, their life insurance from an employer ends when they depart a job. It is a significant problem for retirees. If you relied on this coverage for the duration of your employment, you might see severe rate increases when you start shopping for an individual policy. For this reason, investing in individual coverage in addition to an employer’s coverage is often best. Securing your own life insurance when you’re young can help you access and keep lower premiums.
About 1891 Financial Life
At 1891 Financial Life, we don’t just sell policies; we offer possibilities. We pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs.
Our portfolio is extensive, ranging from various life insurance policies to our MYGA to support your financial needs no matter what stage of life you’re in. For more information, contact us at (855) 804-7424.
Find out how one policy can make a powerful impact.