Fidelity Life: How Do Term Life Insurance Rates Differ by Age?

Term life insurance can offer excellent financial protection to a policyholder's loved ones by paying them a death benefit if the insured dies while the policy is in force. To maintain this coverage, the policyholder must pay premiums during the policy term. One of the most important factors in calculating these premiums is the policyholder's age. This article will explain how age impacts term life insurance rates, then cover several steps consumers can take to lock in the best term life insurance quote for their budget.

Term life insurance rates for younger vs. older policyholders

Younger policyholders can typically qualify for the lowest rates with term life insurance. However, older policyholders may face higher premiums when looking for a policy. Additionally, premiums increase at a lower rate every year when young — whereas older individuals searching for term life insurance may see larger yearly increases. This is because older policyholders have a higher chance of passing away during the policy term due to old age or medical problems.

That said, many insurers lock in premiums once someone buys a policy. For example, with level term coverage, a policyholder who purchases a 20-year policy at age 25 can lock in and pay the same premium at age 25 as their last premium at age 45.

How to lock in a good term life insurance rate

Here are some steps policyholders can take to lock in a good term life insurance rate:

1. Get a policy as soon as possible

As discussed, younger policyholders will often qualify for better rates on term life insurance. So, they can get a policy while young and pay the same low premiums for the entire term. As for older policyholders, they should also get a term life insurance policy as soon as possible since premiums can increase by a much larger amount each year. 

2. Only get the coverage needed

The larger the death benefit, the more a policyholder will owe in monthly premiums. Policyholders should figure out their coverage needs to prevent paying for unnecessary coverage.

In general, policyholders should consider a death benefit worth 7 to 10 times their income. They should also factor in how many beneficiaries they'll add to the policy, since more beneficiaries may require paying for more coverage.

3. Shop for multiple quotes

Insurers may offer different premiums for the same level of coverage. Life insurance shoppers should gather multiple quotes, then compare premiums and coverage before moving forward with a particular quote. This can help lock in the best deal on a term life insurance policy.

4. Improve health before getting a policy

Health is one of the main factors impacting premiums aside from age. Policyholders at any age may be able to secure lower premiums by taking measures to lose weight, reduce blood pressure, and quit smoking.

Get the best rates on term life insurance

Younger policyholders tend to pay lower premiums than older policyholders. Additionally, premiums tend to increase by larger amounts each year for older life insurance shoppers. But policyholders of any age can often lock in the best rate by getting a policy as soon as they think they want one. From there, they should determine their exact coverage needs, work on improving their health, and then shop for multiple quotes. Following these steps can help policyholders get a budget-friendly term life insurance policy that provides great coverage.

For all media inquiries, contact: 

Laura Zimmerman, Chief Marketing Officer

laura.zimmerman@fidelitylife.com, (312) 288-0068