A life insurance policy can provide financial support for your family or someone else you name as a beneficiary if you pass away. The type of policy, your age, your health status and the insurance company you choose can all affect your rates.
Types of Life Insurance
With a permanent life insurance policy, you will pay premiums for as long as the policy is in effect and your beneficiaries will receive a death benefit when you die. There are several types of permanent life insurance coverage, including whole, universal, variable and variable universal life. Those types of policies have a savings component that may affect your premiums and/or the amount of the death benefit.
Term life insurance offers coverage for a predetermined period of time, during which you will pay annual premiums. If you die while the policy is in effect, your beneficiaries will receive a death benefit. If you die after the policy expires, they won’t collect a benefit. Term life insurance policies generally have lower premiums than permanent life insurance policies.
How Your Risk Class Can Affect Your Rates
Insurance companies assign applicants to risk classes based on a number of factors, including age, gender, health, family history, occupation and dangerous hobbies. Actuarial tables provide information on life expectancy and mortality rates that influence the cost of life insurance. Applicants who are considered risky because of age, current health or other factors are charged higher rates than those who are younger and in better health.
How Your Age and Health Can Affect Your Ability to Get Life Insurance
Every insurance company has its own underwriting requirements. That means that your age and health may affect your premiums in different ways, depending on which insurer you contact to request a quote.
As you get older, you will appear riskier to an insurer and your coverage options will become more limited. Life insurance companies typically require medical exams, which may include a series of questions, blood and urine tests, and an EKG. As you get older, the requirements will typically become more stringent. Some insurance companies offer life insurance without a medical exam, but they may charge significantly higher rates.
How to Qualify for Affordable Life Insurance Coverage
Age is the primary driver of life insurance premiums. While you can’t turn back the clock, there are some things you can do to control your premiums. If you have been thinking about purchasing life insurance but haven’t yet, do it as soon as possible. The longer you wait, the higher your premiums will be. If you are currently overweight, smoke or work in a risky profession, improving your health or getting a new job in a safer occupation will make you less risky in the eyes of an insurer and may help you qualify for lower rates.
