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How Does Age Affect Life Insurance Rates?

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If you’re shopping for life insurance, you may have wondered how insurance companies calculate your quote. One of the biggest factors that influence how much you’ll be paying is your age – here’s how. 

Life insurance premiums increase with age

The older you get, the more expensive your life insurance also gets. Insurers calculate quotes based on your individualized factors, and the more high-risk you are in passing, the more you’ll be paying for life insurance coverage. So it’s simple – as you age, you hold more risk, resulting in more expensive premiums. 

At what age does a life insurance policy go up?

Life insurance policies typically go up with every year you age, but you can expect a more substantial increase when you reach 50 years old. So if you think you’ll need financial protection for the future, it’s a good idea to be proactive ahead of time. 

How age affects term life insurance 

Term life insurance premiums are set at the same price for the entire term, but this price will be more expensive if you purchase the policy later in life. And if you want to renew the coverage for another period after your term ends, your new premium will be calculated based on your current age. 

For example, if you opt for a 20-year term policy at age 20, you could pay around $250 every year until you reach the end of the term. However, renewing your coverage for another 20 years at 40 years old could now cost you $400 annually because of your increased risk factors. 

Some insurance companies also offer an option to convert your term life policy into whole life coverage. Your age during the conversion will influence your rate, but by doing so, you can rest easy knowing you won’t need to keep renewing a term policy with increased rates each time. 

How age affects whole life insurance

Whole life insurance, a type of permanent life insurance, also has a consistent premium you’ll be paying each period. The cost of your insurance won’t increase each year because of age, but the age at which you purchase the policy matters. Getting your whole life coverage at 30 years old can lower your premium by thousands of dollars, compared to age 50. 

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The cost of life insurance by age

Below are two tables outlining the cost of life insurance for term life insurance and whole life insurance by age and gender. Keep in mind that the price you’ll be paying will differ, because life insurance rates are determined on a case-to-case basis. To find out how much you’ll be paying, be sure to compare life insurance quotes with us. 

Methodology: The rates below are calculated for an annually paid policy with $500,000 in face value for a regular-risk individual that does not smoke. All term life rates are based on a 20-year term policy, and aach price is the average of the three lowest premiums offered. 

Average term life insurance rates by age

Age

Male

Female

20

$334

$232

30

$347

$253

40

$526

$389

50

$1,403

$956

60

$4,453

$3,193

 

Average whole life insurance rates by age

Age

Male

Female

20

$2,012

$1,683

30

$3,012

$2,517

40

$4,766

$3,994

50

$7,602

$6,462

60

$12,960

$11,050

 

Can I be denied life insurance because of age?

Yes, life insurance companies have maximum age limits in which they will no longer issue a policy. Term life policies typically cap at around 75 years old, and insurers will also limit the length of coverage offered as you age. For instance, at 70 years old, you probably won’t be able to find an insurer that offers 20 years of coverage, but getting a 10-year term policy is still possible. 

Whole life insurance usually has a higher age limit, so you may still be able to find coverage until you’re about 85 years old. Another life insurance option for seniors would be guaranteed life insurance. Ideal for those that don’t qualify for regular policies, guaranteed life insurance has an age limit of about 75 years old, but your coverage can be secured, despite any high-risk factors (e.g. critical illness).  

Keep in mind that every insurance company is different, so getting denied from one insurer doesn’t mean you won’t be able to find a suitable policy at all. Be sure to speak with a life insurance broker to learn more about all your options. 

Why is my life insurance premium so high?

Insurers calculate your quotes based on your risk level. Other than age, there are a few other factors that can increase your life insurance premium, including:

  • Smoking
  • Gender (males tend to pay more because of a shorter life expectancy)
  • Health issues (e.g. chronic illness, high blood pressure)
  • Participating in dangerous activities (e.g. skydiving) 

The best way to ensure you’re paying the lowest premium possible is to compare life insurance quotes. Despite submitting the same factors, some insurers will offer premiums that are hundreds of dollars over others, so it’s important to consider all your options before deciding which company to opt for. 

The bottom line

Your life insurance premium only increases as you age, so it’s a good idea to consider purchasing a policy while you’re young and healthy. However, that doesn’t necessarily mean you need to call a broker at this moment – figure out if the financial protection is worth the investment, and if it is, then know sooner is better (or cheaper) than later. 

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