Jane Dotson
Life insurance is a product that people can buy at almost any age, but the younger and healthier you are, the more money you will save. This is because the older you are, the more likely you are to become ill or die while under coverage, and so the higher your premium will be. Life insurance companies use a different calculation to work out your age, which is normally based on your nearest birthday, also known as your half-birthday age.
| Characteristics | Values |
|---|---|
| How is your life insurance age calculated? | Your age is normally based on your nearest birthday, also known as your half-birthday age. |
| Average age of the typical life insurance buyer | 45 years old |
| How to calculate actual age when buying life insurance coverage | Attained Age or Age Nearest is a way of determining the policyholder’s age for pricing calculations on insurance policies. |
| How does age affect life insurance rates? | The younger and healthier you are when buying life insurance, the more money you'll save. |
| How much does age raise your rate? | The premium amount increases, on average, about 8% to 10% for every year of age. |
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What You'll Learn
How age affects life insurance rates
Age is a key factor when it comes to life insurance rates. The younger and healthier you are, the more money you will save on life insurance. This is because, as we age, we are at an increased risk of developing health conditions, which can result in higher mortality rates and higher life insurance rates.
Life insurance companies use a different calculation to determine your age. Your age is normally based on your nearest birthday, also known as your half-birthday age. For example, if you are turning 40 on July 1, on June 30, you would be considered 40, and on July 1, you would be considered 41. This calculation is fairer to life insurance buyers, as it ensures that people who are closer to their next birthday are not subsidising those who are further away.
The average age of the typical life insurance buyer is around 45 years old. Many middle-aged couples own a home and prioritise mortgage protection life insurance. The premium amount for life insurance typically increases by about 8% to 10% for every year of age. This increase can be as low as 5% annually if you are in your 40s and as high as 12% annually if you are over 50.
With term life insurance, your premium is established when you buy a policy and remains the same every year. However, with some permanent life insurance policies, the premium rises every year. Age also affects whether a person will qualify for life insurance coverage, as qualifying medical exams become increasingly stringent as you age.
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How is your life insurance age calculated?
Life insurance companies use a different calculation to work out your age than you might expect. Your age is normally based on your nearest birthday, also known as your half-birthday age. So, for example, if you were turning 40 on July 1, on June 30, you’d be 40, but on July 1, you’d be 41. This is fairer to life insurance buyers, as it means that people who are closer to their next birthday are paying a higher premium, which is more likely to reflect their health and therefore their likelihood of needing to claim. The younger and healthier you are when buying life insurance, the more money you'll save. As we age, we're at increased risk of developing health conditions, which can result in higher mortality rates and higher life insurance rates. You'll typically pay less for life insurance at age 25 than at age 40. With term life insurance, your premium is established when you buy a policy and remains the same every year. With some permanent life insurance policies, the premium rises every year.
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How to get a good life insurance rate
Life insurance companies use a different calculation to work out your age than you might expect. Your age is normally based on your nearest birthday, also known as your half-birthday age. So, if you're turning 40 on July 1, on June 30, you'd be 40, and on July 1, you'd be 41. This is to make sure that life insurance buyers are treated fairly.
The younger and healthier you are when buying life insurance, the more money you'll save. This is because as we age, we're at increased risk of developing health conditions, which can result in higher mortality rates and higher life insurance rates. You'll typically pay less for life insurance at age 25 than at age 40. The average age of the typical life insurance buyer is around 45 years old.
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. With some permanent life insurance policies, the premium rises every year.
To get a good life insurance rate, it's best to buy life insurance when you're young and healthy.
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The average age of a life insurance buyer
The older you are, the more likely you are to become ill or die while under coverage, so age also affects whether a person will qualify for life insurance coverage at all. Qualifying medical exams get increasingly stringent as you get older. You'll typically pay less for life insurance at age 25 than at age 40, and the premium amount increases, on average, about 8% to 10% for every year of age. This can be as low as 5% annually if you're in your 40s, and as high as 12% annually if you're over 50.
Many middle-aged couples own a home, and mortgage protection life insurance is usually a high priority.
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How age affects whether you qualify for life insurance
Age is a key factor in determining whether you qualify for life insurance. Life insurance companies use a different calculation to determine your age, which is normally based on your nearest birthday, also known as your half-birthday age. For example, if you turn 40 on 1 July, on 30 June, you'd be considered 40, but on 1 July, you'd be considered 41. This method is considered fairer to life insurance buyers, as it prevents older people from paying the same premium as younger people.
The younger and healthier you are when buying life insurance, the more money you'll save. As we age, we're at an increased risk of developing health conditions, which can result in higher mortality rates and higher life insurance rates. On average, the premium amount increases by about 8% to 10% for every year of age. This can be as low as 5% annually if you're in your 40s and as high as 12% annually if you're over 50.
The average age of the typical life insurance buyer is around 45 years old. Many middle-aged couples often own a home, and mortgage protection life insurance is usually a high priority. However, it's possible to get great life insurance rates at almost any time in your life if you're in good health.
When it comes to determining the policyholder's age for pricing calculations, the "Age Nearest Birthday" method is commonly used. This method considers your age on the day you move within six months of your next birthday. For example, if you turn 71 in less than six months, your life insurance age would be 71.
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Frequently asked questions
There is no set insurable age for life insurance, but generally, the younger and healthier you are, the more money you will save. The average age of the typical life insurance buyer is 45 years old.
Your age is normally based on your nearest birthday, also known as your half-birthday age. For example, if you are turning 40 on July 1, on June 30, you would be considered 40, and on July 1, you would be considered 41.
The premium amount increases, on average, about 8% to 10% for every year of age. This can be as low as 5% annually if you are in your 40s, and as high as 12% annually if you are over 50.
