When you buy term life insurance, your age is one of the most significant factors in determining your cost. In general, the younger you are, the cheaper life insurance is.
Are you shopping for term life insurance and wondering how much it might cost? Keep reading. In this guide, we dissect term life insurance rates by age and length of coverage.
How Does Age Impact Life Insurance Rates?
Life insurance companies set rates according to an applicant’s risk of death. The policy only pays out if the insured individual passes away while coverage is active.
No matter how healthy you are, the probability of death increases with age, which means insurers are more likely to write your beneficiaries a large death benefit check if you wait until you’re older to buy coverage — this one reason permanent life insurance is much more expensive than term life insurance.
- Permanent life insurance coverage means your beneficiaries will get paid no matter when you die because it lasts a lifetime.
- Term life insurance means your beneficiaries get paid only if you die during those set years of coverage.
What Else Impacts Term Life Insurance Costs?
There are two parts of a term policy that can impact your costs:
- The term length is how many years you have life insurance coverage. Term lengths range from 10-40 years. The longer the term, the higher the rate.
- The face amount is how much coverage you have. It’s the death benefit amount your beneficiaries receive if you die during the term. The larger the face amount, the higher the rate.
In addition, the cost of a term life insurance policy is customized specifically to your circumstances as the insured individual.
The cost of a term life insurance policy depends on individual circumstances and risk factors. Through a process called underwriting, carriers evaluate your risk to determine your costs.
Other than age, factors that impact life insurance rates include:
- Health & pre-existing conditions
- Gender
- Occupation
- Hobbies
- Height and weight
- Family health history
- Tobacco use
- Drug and alcohol use
- Financial history
Insurance companies usually evaluate anything that can affect your life expectancy. It may seem meticulous, but insurers are all about risk.
If you’re worried that your risk factors may limit your ability to get life insurance, be sure to work with a broker like Quotacy. As an independent broker, we can shop around on your behalf to find the carrier most likely to approve you for the best coverage at the best price.
Term Life Insurance Rates by Age
Insurance companies often adjust their pricing at specific age milestones, such as 30, 40, 50, and so on. Buying life insurance as soon as you need it is in your best interest.
One great thing about term life insurance is that once you buy a policy, your rates are fixed for the entire term. Let’s break down term life insurance rates by age based on the length of coverage.
10-Year Term Life Insurance Rates by Age
How long do you need coverage for? Some situations in which a 10-year term could be appropriate include:
- Short-term financial obligations: If you have short-term financial responsibilities, such as paying off a private loan, and don’t want your loved ones to inherit debt left behind.
- Income replacement for a limited time: If you’re approaching retirement and anticipate only needing income replacement for your dependents for a few more years.
- Mortgage protection: Cover the remaining years of a mortgage, and ensure your family can remain in their home if you pass away.
- Supplemental coverage: Having more than one life insurance policy, such as additional whole life, provides extra financial protection during a specific period of increased financial responsibility (e.g., when your children attend college).
- Business-related coverage: If you’re a business owner, you may want to cover a key employee, protect against the loss of a business partner, or secure a business loan during a crucial growth period.
- Affordability: If you’re on a tight budget but still want some life insurance coverage. If you expect your financial situation to improve in the future, you can reevaluate your insurance needs and possibly buy a longer-term policy or convert to a permanent one.
The life insurance rates below provide pricing examples for individuals in excellent health, ages 20-60, applying for a 10-year term policy.
20-Year Term Life Insurance Rates by Age
The 20-year term length is one of the most popular choices for parents. Parents often buy a 20-year term because it’s affordable but also aligns nicely with the years their children are growing up and financially dependent.
Situations in which a 20-year term could be appropriate include:
- Family protection: Provides financial security for your family when financial obligations are the greatest, such as when your children are young and dependent on your income.
- Income replacement: Provides income replacement for your spouse or partner in the event of your death, ensuring they can maintain their standard of living and meet financial obligations.
- College education funding: Ensures funds are available for children’s education expenses if you pass away before your children finish school.
- Mortgage protection: Ensures your family can continue living in their home in the event of your death.
- Business-related coverage: If you’re a business owner, you may want to cover key employees, protect against the loss of a business partner, or secure a business loan during a crucial growth period.
- Long-term debt protection: Protects against long-term debts, such as student loans or car loans, ensuring that loved ones are not burdened with these financial obligations if you pass away.
The life insurance rates below provide pricing examples for individuals in outstanding health, ages 20-60, applying for a 20-year term policy.
If you’re looking for a happy medium between coverage that lasts 20 and 30 years, some carriers also offer 25 year term life insurance policies.
See what you’d pay for life insurance
30-Year Term Life Insurance Rates by Age
A 30-year term policy is popular for couples who recently purchased a home since many mortgage loans are 30-year terms. It assures your partner won’t be left with a mortgage they can’t afford if you die before it’s paid.
Situations in which a 30-year term could be appropriate include:
- Young families: Provides long-term financial protection for young families with children, covering them from birth until they become financially independent adults.
- Long-term income replacement: Ensures your partner has financial support for an extended period in case of your death, allowing them to maintain their standard of living and meet financial obligations.
- Mortgage protection: Ensures your family can pay off the mortgage and continue living in the home if you die unexpectedly.
- Business-related coverage: If you’re a business owner, you may cover key employees, fund a buy-sell with business partners, or secure a business loan over a more extended period.
The life insurance rates below provide pricing examples for individuals in great health, ages 20-60, applying for a 30-year term policy.
40-Year Term Life Insurance Rates by Age
A 40-year term is the longest term length you can purchase. It has higher premiums than shorter terms but allows you to lock in your rate for a long time and is more cost-effective than a permanent policy.
Situations in which a 40-year term could be appropriate include:
- Young buyers: If you’re relatively young and want to ensure that your dependents or loved ones are financially protected for an extended period, a longer term provides coverage through your working years and into retirement.
- Long-term financial obligations: If you have significant financial obligations, like a mortgage or student loans, that will last for several decades.
- Estate planning: In this case, the policy’s death benefit could cover estate taxes or provide financial support to your heirs.
- Income replacement: Provides income replacement for your partner or dependents if you pass away. This can be particularly important if you’re the primary earner for your family.
- Family health concerns: If your family has a history of premature death or congenital health issues, you may consider locking in long-term coverage at a low rate before any problems develop.
The life insurance rates below provide pricing examples for individuals in great health, ages 20-60, applying for a 40-year term policy.
Curious about rates for permanent life insurance policies, as well as term? Explore what you can expect for average monthly life insurance costs in 2023.
Get a Term Life Insurance Quote and Apply for Coverage
Many online life insurance providers require an email or phone number before showing accurate quotes. Not here. Find out what you could pay for term life insurance and compare quotes without giving up personal information.
We recommend purchasing life insurance as soon as you need it to lock in an affordable rate. By understanding how term life insurance rates vary by many factors, you can make informed decisions about your life insurance coverage.
Note: Life insurance quotes used in this article are accurate as of May 25, 2023. These are only estimates and your life insurance costs may be higher or lower.
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