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Understanding term life insurance rates by age

It’s hard to put a price on the peace of mind you’ll have when your family is financially protected by a term life insurance policy. But there’s no sense in paying more than you have to for that protection. While it’s true that term life insurance tends to be the most affordable option available, the price of a policy will increase if you wait until you’re older to apply.

In this article, we’ll discuss the factors that impact term life insurance rates by age and how you can secure the most affordable term policy at every stage of life.

What factors affect the cost of term life insurance rates?

Several factors may affect term life insurance rates, including:

  • Age: Since younger individuals are statistically farther from death, rates are generally lower for young applicants and increase as you get older.
  • Gender: Rates for women tend to be lower than men since women have a longer life expectancy.
  • Tobacco use: Premiums are higher for smokers than non-smokers.
  • Health: Those in the best health tend to receive the most favorable life insurance rates. Those who have health issues or a chronic condition may still be able to find a great term life insurance policy, albeit at a higher rate.
  • Occupation: Those who work a risky job may see significantly higher term life insurance rates and may not qualify for certain types of coverage. In this case, it may be best to consider an Accidental Death Benefit (ADB) policy that doesn’t have the same health and occupational restrictions.
  • Lifestyle: Lifestyle factors like your driving record, financial history, and criminal background could all impact your eligibility for life insurance and the rates you may be offered.
  • Family medical history: If someone in your immediate family has a history of a life-threatening illness, such as diabetes or cancer, you may face a higher life insurance rate.
  • Length of coverage term: A term life insurance policy with a longer term will typically have higher rates, all other factors constant.
  • Coverage amount: Rates increase as the policy’s coverage amount, or payout, increases. This is the amount a beneficiary receives from the policy when the policyholder passes away.

10-Year term life insurance rates by age

A 10-year term life insurance policy is often the shortest policy you can get. A policy with a shorter term generally makes sense if you only have a few years to pay off any large financial obligations, like a mortgage. A 10-year term can also provide affordable protection for older adults who are on the verge of retiring or reaching financial independence.

For example, a 30-year-old female in good  health could get a $500,000 10-year term life insurance policy for around $21 a month, while a 40-year-old female might pay $27 a month for the same coverage. For comparison, a healthy 30-year-old male looking for the same $500,000 10-year term policy might pay $23 per month, slightly more than the female applicant. A 40-year-old male, on the other hand, would be looking at a rate of around $29 monthly for the same coverage amount and term length.

20-Year term life insurance rates by age

A 20-year term life insurance policy is the most popular, and for a good reason. 20 years is often sufficient time to financially protect a family through many life milestones, like paying off a mortgage or raising children. Another benefit of a 20-year term is that it’s often affordable, even for applicants in their late 30s and 40s.

30-Year term life insurance rates by age

The major benefit of a 30-year term life insurance policy is that it enables you to lock in a lower rate at a young age, then have financial protection for decades of life changes. If you’re planning to get married, buy a house, or have children, a 30-year term is often sufficient to cover loved ones through those stages of life. Plus, the long-term safety net of a 30-year term policy is often less expensive than permanent coverage and may be the best option for those who know financial obligations will end after a set period.

How much do term life insurance rates rise as you age?

On average, purchasing life insurance can be 8-12% more expensive each year. That means a 40-year-old non-smoking female in excellent health could pay $40.02 per month for $500,000 in coverage on a 20-year term. However, if that same woman waits until age 41 to secure a 20-year term policy with no other changes in health, she could face a premium rate of $43.50 per month. While it may not seem significant at first glance, over 20 years, she’ll be paying an extra $835.20 for the same coverage, an approximately 8.6% increase.

How to find the lowest term life rates according to your age

Since rates continue to increase with age and health issues often tend to present later in life, the best opportunity to lock in the lowest rates is to apply for life insurance coverage young.

Other opportunities to lower your rates include improving your health by quitting smoking or losing weight. Reconsidering dangerous hobbies like rock climbing or skydiving could also save you money. If the term life policy you’re applying for requires a medical exam, you may qualify for better rates if you get good results.

Get a term life insurance quote at every age

Still have questions about term life insurance rates and how much a policy might cost? Getting a quote is free, or you can contact one of our agents at 866-912-7775 to explore your options and find the best fit for you and your family’s needs.

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