How Your Age Plays a Role In Life Insurance

When it comes to life insurance, insurers take various factors into consideration. Amongst those factors that play a major role are one’s health, family medical history, lifestyle and age. Amongst these factors, age plays a major role, especially when it comes to life insurance premiums. Age plays a major role for various reasons and is deemed one of the determining factors when it comes to the amount to pay in life insurance premiums. In insurance, the older one is, the higher the amount of one’s life insurance premiums.

Age and life expectancy

It is generally accepted that the older one is the lower their life expectancy. Insurers work actuarial data and depending on life expectancy of the human population in a country, the older one is, the closer they are deemed to be towards their expected end here on earth, which is death. Older persons are considered to be at their penultimate time here on earth and as such they incur higher life insurance premiums than younger people. For example a 25 year old person can receive life insurance cover of one million rand for a monthly premium of about one hundred and twenty rand while a 50 year old can receive life insurance of the same amount for about three hundred rand per month. A fifty year old is deemed in this case as closer to exiting planet earth while a twenty five year old is deemed to have just made an entrance into planet earth and with many more years remaining. Whether such reasoning and estimates still apply in our society is questionable, given the high mortality rate among the youths compared to those advanced in years. Age is also a factor to determine whether one’s life is insurable or not and has been used to determine whether one can obtain life insurance or not.

Age and the risk factor

Life insurance companies insure against risk and uncertain future events. The older one is, the higher the risk of death and suffering from various old age related illnesses that can lead to death. When one is older, death becomes a very certain uncertain event which is brought even closer. As a result insurers deem older people as high risk insurance people who must pay premiums commensurate with the high risk they pose. The opposite is true. Younger people are deemed to be lower insurance risk and as such pay lower life insurance premiums as they are deemed to live longer and therefore will continue to pay life insurance premiums for longer.

Taking life insurance when younger is advised

When you take life insurance policy at an old age, you stand to pay exorbitant premiums as you are deemed closer to death. Such premiums are prohibitively high in most circumstances. One way to avoid paying such premiums is not to wait until one is forty to take out life insurance cover. The younger one is the lower and more affordable one’s premiums will be. Taking life insurance has no age. It is a wise way of taking care of one’s tomorrow and loved ones at a time when you are gone. One can never start early enough. In fact, the earlier one starts the better.

Age matters when it comes to life insurance premiums. One’s age plays a major if not the most important role when determining how much in premiums one will pay.