Life Insurance Rate Chart by Age: How Age Affects Your Premiums (2024)

FAQs

Does age affect life insurance premiums? ›

The rationale behind using age as a major factor in setting rates is straightforward. The older you are, the closer you are to reaching your life expectancy, which poses a higher risk to the insurance company of having to pay death benefits to your beneficiaries.

Typically, the premium amount increases, on average, about 8% to 10% for every year of age; it can be as low as 5% annually if your 40s, and as high as 12% annually if you're over age 50. With term life insurance, your premium is established when you buy a policy and remains the same every year.

Premiums are locked in for the specified period of time under the policy terms. The premiums you pay for term insurance are lower at the earlier ages as compared with the premiums you pay for permanent insurance, but term rates rise as you grow older.

Keeping this in mind, the insurance provider associates a higher risk with you. You are subsequently charged a higher premium for the medical insurance plans. Remember that premium for health plans always increases with age. So, even your existing health plan premium rises with age.

The increase in monthly premiums as you age is much smaller if you are young, compared to when you are older. For example, the average life insurance quote only increases by 6% between ages 25 and 30, but it jumps much higher between ages 60 and 65 — an average increase of 86%, or $275 per month.

Life insurance is no longer needed for many people once they reach their 60s or 70s. At this point they retire, their kids have grown up, and they've paid off their mortgage and other debts. However, others prefer to keep life insurance later in life to leave an inheritance and to pay off final expenses.

Whole life insurance provides guaranteed death benefit protection for as long as you live while earning cash value. A whole life insurance policy doesn't expire as long as regular premiums are paid. The cash value grows, tax-deferred, at a guaranteed rate, and the premiums never increase.

Younger individuals generally pay lower medical insurance premiums compared to older adults. This is because younger age groups tend to have fewer pre-existing medical conditions and are less likely to require extensive medical care.

The longer the term period, the higher the premium because the older, more expensive to insure years are averaged into the premium. At the end of the term period, your premium can increase dramatically. Therefore, it is important to choose the proper term period and to be aware of when that period ends.

Many people in their 60s and 70s may no longer need life insurance. They may have already paid off the house, stopped working, sent the kids off to care for themselves or accumulated enough assets to offset the need for life insurance. But sometimes buying or maintaining a life insurance policy over age 60 makes sense.

What is the life insurance reduction at age 65? ›

Reductions Based on Age

Life insurance coverage for you (basic and supplemental) is reduced based on your age. From age 65 to 69, coverage amounts will be reduced to 65%. At age 70, coverage amounts will be reduced to 35%.

Rates gradually rise as a policyholder ages, with the most significant increase occurring after age 50. Individuals under 21 only pay a fraction of the base rate since they tend to be healthy people with fewer risk factors for critical illnesses.

Most states use your age to determine your health insurance rate. Only two states do not use age when setting rates: New York and Vermont. If you live in any other state, your health insurance rate changes based on your age.

Another factor influencing life insurance premiums is the insured person's age. Generally, if you're young, you will pay a lower premium. As you get older, there is a greater risk that your health deteriorates. This results in higher premiums.

Car insurance can be more expensive for older individuals — even those with a stellar driving record — for several reasons. According to Progressive, car insurance companies usually offer lower rates for drivers between 45 to 55 years old, but once a driver turns 75, they should expect to pay more.

If you live long enough, your policy will eventually “mature.” When you reach the age of maturity, your policy will pay out the cash value of the policy and your life insurance coverage ends.

Age Benefit Reduction

As you can see, starting at age 65, the benefit declines dramatically. For example, a basic life policy with a $50,000 benefit will decline to $35,000 at age 65 and will only pay $12,500 by age 75.