Attained Age Life Insurance Calculator

How to Calculate Life Insurance Premiums   

Obviously, age is not all that insurance companies will evaluate when calculating the price you pay for life insurance.

The primary unit for figuring out a life insurance rate is the cost per $1000 of insurance which can vary and often depend on many different factors.

These other aspects of the underwriting process also play a significant role in what your life insurance policy will eventually cost you.

Factors in the Calculation of a Life Insurance Premium:

• • • • • • Attained Age
          • Gender
          • Tobacco Usage
          • Health
          • Family History
          • Type of Policy
          • Death Benefit

How does gender affect life insurance rates? Gender plays an important role in determining how life insurance rates are calculated. Healthy females at all ages will always lock in much cheaper rates than males at any age.

Why are life insurance premiums higher for males? This is because men live for a shorter period of time than females. This means that the life insurance company is more likely to pay a death benefit sooner and collect less premium money before a man’s death.

The type of policy you select will be another factor in determining how your premium is calculated. Term insurance is much cheaper compared to a longer-running whole or universal life coverage at any age.

The premiums for your life insurance are also based on many personal factors like age attained, smoking status, height, weight, medical background, and family history.

Most insurance agents will always tell you the best time to compare life insurance rates and buy a policy is while you are still young and healthy.

The great thing about buying life insurance for young people is that it is affordable to purchase either term or permanent coverage. 

People in good health can get great life insurance rates at almost any time in their life. In fact, 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.

They are also in the prime of their careers and are now making more money than they were at any point in their lifetime. Many married people purchase life insurance in their 50’s to protect each other’s income.

If you are a healthy senior and people depend on you financially, you might want to consider life insurance to protect your family.

Term life insurance is the cheapest type of policy for older aged people looking to obtain a large death benefit at a low cost. Plus, term life insurance for seniors is not nearly as expensive as whole life or universal life.

Since term life is a type of coverage that only lasts for a short time, it is always the most inexpensive life insurance for seniors needing, say, a $500,000 policy with a specific need in mind.

Term insurance is not the best plan for older people only looking for a small death benefit to pay for final expenses. Instead, seniors should normally have permanent coverage like universal or whole life to cover burial costs or pay off bills.

Life Insurance Age

Life insurance premiums will increase on average by about 3% to 12% for every year, depending on your current age.

The rates increases are less significant for younger applicants, with the average increase between 3% to 8% every year.

While your premium will increase in cost more rapidly when you are over the age of 50, we normally see rate increases each year in the neighborhood of 9% to 12% for middle-aged and senior clients.

Most companies offer level term coverage rather than increasing your premiums every year. So, carriers spread your premiums over 20 or 30 years and average them into a static, fixed payment.

This eliminates the worry of paying low premiums when you are younger and super high premiums when you are older.

The increase in cost is that every birthday puts you one year closer to your life expectancy. The premium increases really escalate as you start to look into securing longer running 20 and 30-year term lengths.

The reason is that the tail end of your term policy extends even further into your older age, putting the insurance company at greater risk for paying a claim.

So, every year counts when looking at your life insurance age!

A 47-year-old male buying a 20 term policy with a $1,000,000 death benefit will pay $1,221. The same policy would cost $1,336 waiting for a year and purchased at age 48.

Let’s jump forward and take a look at the life insurance age of 57 vs. age 58.

A 57-year-old male buying a 20-year term with a $1,000,000 death benefit will pay $3,222. The same policy would cost $3,622 a year if purchased at age 58.

Wow, getting a year older takes a big price jump in just ten years!

The saving also needs to be calculated over the total number of term years.

If you save $400 per year for twenty years, this amounts to $8,000 of cost savings during the full policy duration.

As you can see, when looking at larger death benefits at older ages, it really makes sense to look into a company that offers age last birthday. 

Remember, actual age pricing is only offered by a few life insurance companies.

Affordable Life USA can help you find these niche insurance carriers and determine if they will be cheaper for you.

In some cases, an age nearest company will actually offer more affordable premiums, but normally not as often as people reach more advanced ages.