Today I’m going to share some secrets other agents won’t reveal…Cutting the cost of life insurance!
Life insurance is a necessary evil that most people loathe to deal with, but it’s something everyone should buy to protect their family from the unthinkable.
However, it’s probably much more affordable than you think.
In fact, you might be surprised to hear that over 2 out of 3 people surveyed OVERESTIMATED the cost of life insurance.
So how do life insurers determine how much you pay for a policy, and what can you do to minimize your cost?
I will unravel the mystery that surrounds the cost of life insurance by analyzing the major factors that affect what you pay.
In this article:
- Life Insurance Costs Increase as You Age
- How Pre-Existing Conditions Affect Life Insurance Pricing
- 6 Tips for Reducing the Cost of Life Insurance
- How a Medical Exam Affects the Cost of Life Insurance
- Average Cost of Term vs. Whole Life Insurance
Life Insurance Cost Depends Largely on Your Age
One of the biggest factors that determine the cost of a life insurance policy is your age.
The reason is simple. At some point, everyone who is born will die. The average life expectancy in the U.S. today for both genders is 78.8 years of age. For males, the life expectancy is 76 while for females it is approximately 81.
Women are expected to live longer, so the rates they pay are less than what a male would pay.
Life insurance companies use complicated algorithms that factor in, not only your age but a whole host of other circumstances.
So how does age specifically affect your premium?
Every birthday puts you one year closer to your life expectancy and thus, you’re more expensive to insure,”…rates increase every year by 5% to 8% in your 40s, and by 9% to 12% each year if you’re over age 50.
In other words, as you age you get closer to the expected date of your mortality. Life insurance becomes more expensive as you grow older, for this reason alone.
The cost of a premium, for the most part, remains level from 18 – 30. There isn’t much difference in what you pay between the ages of 31 – 35.
After the age of 35, your premiums really start to increase and may escalate significantly with each passing year.
Buy Life Insurance When You’re Young and Healthy to Save Money
Look! You don’t want to spend more money than you have to on life insurance.
If you buy term life insurance, you will be investing money into a policy for at least 20 – 30 years. Buying life insurance when you are young WILL SAVE YOU A LOT OF MONEY.
The same applies to Permanent policies such as Universal or Whole Life