Term Life Insurance Articles
Reasons Term Life Premiums Will Increase Over Time
2011-06-18
Life insurance is an important aspect to financial planning. It is a way to ensure that loved ones' needs are met in the event of a tragedy. Of the different types of life insurance, whole life, universal life, and term, term life premiums are the lowest. However, any survey of term life quotes will reveal that they increase over time.
There are a few reasons why term life premiums increase over time. All of these are related to health. First, there is the potential of developing bad habits. Second, an undiagnosed health concern might be discovered. Finally, as people age, their health deteriorates.
Perhaps it is unlikely, but it is possible for a person to develop a "bad habit" in the future. Certainly some have succumbed to smoking or alcoholism, as sad as it is. Everyone thinks they are immune to temptations such as these; but, everyone is human. In the face of tragedy and stress, some people do turn to habits which shorten their lives. Because excessive drinking and smoking have been proven to eventually lead to death, life insurance companies must raise the rates for people who indulge in these activities. Term life quotes are cheaper for non-smokers than smokers. Purchasing term life insurance prior to taking up one of these would be cheaper than delaying the purchase until later, after taking up an unhealthy or destructive habit. Although this first reason seems improbable, insurance is meant to protect against the unlikely.
A more likely scenario is the risk of being diagnosed with a health condition, which either currently is undetected or not an issue at the time. Life insurance companies factor into their quotes all sorts of health issues. Some of these include: diabetes, high cholesterol, heart disease, and high blood pressure. Any of these could be diagnosed in the future and, therefore, term life premiums may cost more in the future.
Even if no dangerous habits are assumed and nothing is diagnosed before considering term life insurance, as people age their general health declines. Term insurance is meant to last for years, if not decades. Statistics show that someone is more likely to pass away at the age of 60 than at 35. Therefore, insurance for a 50 year old will be more than a 30 year old.
While it may seem cold, term life insurance premiums are based on the statistical probability of dying. The old saying holds true, "This is as good as it is going to get." Because people's health generally declines with age, the likelihood of their passing away increases. Thus, the insurance company must assume more financial risk. To compensate for this, the premiums are raised as time goes by.
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Life insurance is an important aspect to financial planning. It is a way to ensure that loved ones' needs are met in the event of a tragedy. Of the different types of life insurance, whole life, universal life, and term, term life premiums are the lowest. However, any survey of term life quotes will reveal that they increase over time.
There are a few reasons why term life premiums increase over time. All of these are related to health. First, there is the potential of developing bad habits. Second, an undiagnosed health concern might be discovered. Finally, as people age, their health deteriorates.
Perhaps it is unlikely, but it is possible for a person to develop a "bad habit" in the future. Certainly some have succumbed to smoking or alcoholism, as sad as it is. Everyone thinks they are immune to temptations such as these; but, everyone is human. In the face of tragedy and stress, some people do turn to habits which shorten their lives. Because excessive drinking and smoking have been proven to eventually lead to death, life insurance companies must raise the rates for people who indulge in these activities. Term life quotes are cheaper for non-smokers than smokers. Purchasing term life insurance prior to taking up one of these would be cheaper than delaying the purchase until later, after taking up an unhealthy or destructive habit. Although this first reason seems improbable, insurance is meant to protect against the unlikely.
A more likely scenario is the risk of being diagnosed with a health condition, which either currently is undetected or not an issue at the time. Life insurance companies factor into their quotes all sorts of health issues. Some of these include: diabetes, high cholesterol, heart disease, and high blood pressure. Any of these could be diagnosed in the future and, therefore, term life premiums may cost more in the future.
Even if no dangerous habits are assumed and nothing is diagnosed before considering term life insurance, as people age their general health declines. Term insurance is meant to last for years, if not decades. Statistics show that someone is more likely to pass away at the age of 60 than at 35. Therefore, insurance for a 50 year old will be more than a 30 year old.
While it may seem cold, term life insurance premiums are based on the statistical probability of dying. The old saying holds true, "This is as good as it is going to get." Because people's health generally declines with age, the likelihood of their passing away increases. Thus, the insurance company must assume more financial risk. To compensate for this, the premiums are raised as time goes by.
