Life insurance rates by age

Did you know life insurance rates increase with age? Use this chart to see how much you can save by shopping early.

If you’re thinking about buying life insurance, the best time to do it is right now — unless you’re older, sick, or have no dependents or people who rely on you financially. But if you’re young and at least a little healthy, there’s a very good reason to buy life insurance now rather than later: you’ll pay significantly less money for the same coverage.

When you purchase life insurance, you agree to pay the insurance company what’s called a premium, a monthly or annual cost ensuring that your policy stays in effect. If you haven’t been keeping up with your insurance premiums, your insurer will not pay out the death benefit to your beneficiaries when you die, rendering the whole thing useless. The rate is based on your medical history, including any pre-existing health conditions, as well as that of your family, and such lifestyle choices as whether you’re a smoker or have dangerous hobbies.

That’s because the older you are, the more like you are to die while you’re insured, so life insurance companies need to account for that risk by charging you more. Check out the Policygenius quote calculator for an estimate and read on to learn what it’ll cost you at every age.

Average term life insurance rates by age

Age$500,000, 10-year term life monthly premium$500,000, 20-year term life monthly premium$500,000, 30-year term life monthly premium
< 25$20.70$30.30$36.90

This table shows the average monthly term life insurance rates for each age range for a $500,000-benefit policy. While different life insurance companies offer different rates, most people just go with the least expensive option that meets their coverage needs.

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Why buy when you’re young

Your rate is set when you sign the policy, and it won’t change during the term of the policy. But every year you put off buying a life insurance policy, premiums increase by an average of 8-10% and begin accelerating even more the older you get. People in their 40s can expect to see rate increases of 5-8% each year they wait to buy life insurance, and those in their 50s may pay as much as 12% more in life insurance premiums each year they delay.

Life insurance policies are meant to complete your financial plan. Just as you plan for retirement by stashing away money in an individual retirement account or 401(k) program, you should plan for how your unexpected demise could affect your family financially.

The best reason to buy when you’re younger is that you’ll get the same life insurance coverage for a much lower price than you’d pay when you’re older. You’re guaranteed to pay the same premium when you take out the policy as when the term comes to an end twenty or thirty years later. If you don’t have any dependents now but think you’ll have some in the future, you could save hundreds of dollars a year by planning ahead — and that means coverage for your kids’ child care and college expenses, even if right now they’re just a twinkle in your eye.

A 30-year term life insurance policy you buy when you’re 25 will cost you a little less than the same plan if bought at age 30, and the premiums just get more expensive from there. By age 55, you could be paying as much as $200 or more per month to get the same coverage you could’ve gotten when you were in your 20s.

But buying when you’re young usually also means buying when you’re healthier. When the insurer checks your eligibility for life insurance and determines the premium, a process known as underwriting, they will run a complete check on your medical history that could include an in-person examination. Unless you have a chronic medical condition, it’s a matter of physics that you’ll be healthier when you’re younger. Any conditions you develop later in life could mean paying a higher premium.

If you’re between the ages of 25 and 29 and healthy, you can expect to pay about $33.60 on average per month for term life insurance, the cheapest option. Most people purchase coverage in their 30s, when that number ranges between $43.40 and $53.30.

When it makes sense to buy when you’re older

There are times when it makes sense to buy a life insurance policy when you’re older. For one, maybe you started a family later than usual, a trend among many millennials who can’t afford to settle down earlier.

However, the older you get, the more expensive your premiums cost – even a healthy person in his or her 50s can expect to pay between three to six times as much per month than in his or her 20s. At age 60 and up, you’re looking at paying hundreds of dollars per month in premiums for a 20-year term.

People pay between $96.20 and $104.50 per month in their 50s, and between $117.10 and $170.10 in their 60s. The life insurance company may require you undergo a more invasive medical exam than the one insurers require for younger customers. That could mean having an EKG or taking a cognitive impairment test.

More importantly, it doesn’t make as much sense to buy when you’re older. For one, you’ll hopefully have fewer people who rely on you for financial security, as your dependents become independents and you start paying off long-term expenses like your mortgage or car loan. Not only will you not need as much coverage, but insurers may not even offer it to you past a certain age.

If you’re looking to buy life insurance when you’re older, it’s best to look beyond term life insurance.

Best life insurance options for older people

  • Final expense life insurance: covers end-of-life expenses, including medical bills and funeral costs. Final expense life insurance can be relatively affordable, but, with coverage ranging from an average of $5,000 to $25,000, it might not be enough to cover all of your beneficiary’s financial burden. Remember that funerals alone can cost as much as $10,000 when all is said and done.
  • Guaranteed life insurance: Sometimes described as a “last resort,” guaranteed life insurance has very high premiums — as much as $200 per month — and a relatively small death benefit. However, you’re guaranteed to receive coverage regardless of your age as long as specific medical conditions, like HIV/AIDS or terminal cancer, don’t render you ineligible. Guaranteed life insurance used to be called “burial insurance,” because by the time the insurer pays out the death benefit, that’s usually all it’ll cover.
  • Actual burial insurance: Meant to pay only for your funeral costs, you might prefer this type of life insurance to guaranteed life insurance because the premiums are lower, even though the coverage is about the same.
  • Simplified life insurance: If you don’t want to take a medical exam, or don’t think you’ll be able to pass one, you might consider simplified life insurance. Because there’s no medical exam, this type of life insurance will be more expensive, but you might be offered coverage as high as $400,000.

If you’re in your 50s and want to take out a new traditional term life insurance policy, try reducing the term to 10 or 15 years in exchange for a lower premium. At that stage in life, your financial obligations are much smaller and you’re almost ready to start tapping into your retirement accounts. Shopping around can help — some life insurance carriers may offer more competitive rates for people with a certain medical condition than others, so it’s always best to compare premiums after plugging in your data.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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