Term Life Insurance Articles
How Age Affects The Premium On Term Life Insurance
2010-11-17
Term life insurance is primarily designed to protect families against the risk of a parent dying while children are young, and the associated financial loss. It is also used in other situations where the death of an individual would mean financial hardship. A term life premium is an investment to cover this risk of an early death.
Term life insurance is a relatively cheap way of protecting your family, especially if taken out when you are young. The reasons are obvious. Actuarial tables tell us that as we age, the risk of death increases. It's a pretty gradual process since the majority of us make it to age 65. A monthly term life premium for someone at age 30 is much less than for someone at age 65. Based on mortality rates, the risk is greater as we age.
A 30-year old man has longer life expectancy than another man at age 65. Because of that, the younger man is able to get term life insurance at a flat, affordable rate for 10, 20, even 30 years. Depending on the contract, he can take a 10-year term and get it renewable at the same rate for a further 10 years. More likely, he will have to go through a medical to make sure that he is not at greater risk because of factors such as high blood pressure and high cholesterol. If these come into play, then the term life premium he pays will increase. Again, actuarial records form part of the rate decision as do the risks associated with particular medical conditions.
When it comes to purchasing term life insurance at age 50, for example, or even at age 65, it's a different story. The risk of someone of that age dying in the next 20 years has risen sharply. With increasing age comes a greater chance of incurring adverse medical conditions. Although some insurance companies offer term life insurance without a medical exam, most insurance companies won't. They need to know the risk of that individual. For the person who has kept in shape, doesn't smoke, has normal blood pressure and is not obese, the term life premium, though high, is manageable compared to the individual who fails to meet those conditions.
Insurability is affected by age and by your state of health. The term life premium reflects that. If you believe that you require term life insurance, the rates are far better when you are young. If you need it later in life, keep yourself in the best shape possible. Your premium, though high, will be more manageable than someone whose health is not as good.
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Term life insurance is primarily designed to protect families against the risk of a parent dying while children are young, and the associated financial loss. It is also used in other situations where the death of an individual would mean financial hardship. A term life premium is an investment to cover this risk of an early death.
Term life insurance is a relatively cheap way of protecting your family, especially if taken out when you are young. The reasons are obvious. Actuarial tables tell us that as we age, the risk of death increases. It's a pretty gradual process since the majority of us make it to age 65. A monthly term life premium for someone at age 30 is much less than for someone at age 65. Based on mortality rates, the risk is greater as we age.
A 30-year old man has longer life expectancy than another man at age 65. Because of that, the younger man is able to get term life insurance at a flat, affordable rate for 10, 20, even 30 years. Depending on the contract, he can take a 10-year term and get it renewable at the same rate for a further 10 years. More likely, he will have to go through a medical to make sure that he is not at greater risk because of factors such as high blood pressure and high cholesterol. If these come into play, then the term life premium he pays will increase. Again, actuarial records form part of the rate decision as do the risks associated with particular medical conditions.
When it comes to purchasing term life insurance at age 50, for example, or even at age 65, it's a different story. The risk of someone of that age dying in the next 20 years has risen sharply. With increasing age comes a greater chance of incurring adverse medical conditions. Although some insurance companies offer term life insurance without a medical exam, most insurance companies won't. They need to know the risk of that individual. For the person who has kept in shape, doesn't smoke, has normal blood pressure and is not obese, the term life premium, though high, is manageable compared to the individual who fails to meet those conditions.
Insurability is affected by age and by your state of health. The term life premium reflects that. If you believe that you require term life insurance, the rates are far better when you are young. If you need it later in life, keep yourself in the best shape possible. Your premium, though high, will be more manageable than someone whose health is not as good.
