What Is The Impact of Age on Life Insurance Premiums?
Updated On May 18, 2021
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The premium is the amount of money that you steadily and regularly pay to the life insurance company to maintain your life insurance coverage. This payment is done according to a certain rate which is dependent on several factors. Of them, the age of the applicant or policyholder is the most crucial.
The Earlier the Better
It is always said to purchase a life insurance plan as soon as possible. This is because the rate of premium rises as you grow older. As an individual grows older, they are more susceptible to illnesses and therefore, get costlier to insure. In turn, there are more risks involved with the plan. Plus, the earlier you start investing, the more you can save up without having to pay for exorbitant premium rates.
Yearly Increase in Premium Rate
With every year that passes, you get closer to your life expectancy and more risks are involved to insure you. Life insurance premium rates for all life insurance plans increase by up to 8% to 10% every year. Therefore, the older you get, the more premium you will have to pay. It is best to select a plan as soon as you get a sustainable income and work towards the financial stability of your loved ones and in times of trouble.
You may also like to read:- How To Do Life Insurance Premium Calculation?
Other Factors Affecting Life Insurance Premiums
Besides age, there are a few factors that also affect your life insurance premium rates:
- Gender: Women are usually charged with lower premiums because studies show they live longer than men.
- Health Issues: If you have any prevalent issues, you will have to pay higher premiums than usual. This is also applicable if your family medical history includes any terminal or critical illnesses.
- Lifestyle Habits: Smokers and tobacco consumers usually have to pay more life insurance premiums because they have a lower life expectancy. They are also more susceptible to critical and terminal illnesses such as cancer.
- Occupation: There are many occupations that involve more risks than others like mining. Those who work in such fields usually have to pay more premiums than the normal rate.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.