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Do Term Life Insurance Costs Increase with Age?

life insurance cost with age

Do Term Life Insurance Costs Increase with Age?

Term life insurance covers you for a set period, anywhere from 5-30 years, depending on the type of your policy. However, its premiums increase as you age or whenever you renew the policy. If you want to pay the same premium amount as long as your policy lasts, you can choose a level term life insurance policy that comes with guaranteed level premiums. However, level-term life insurance may not suit everyone.

What Is a Level Term Life Insurance Policy and How Does It Work?

A level term life insurance policy has a fixed premium rate for the entire duration of your coverage. However, its rate is calculated considering several factors, including your age, health, policy type, payout amount, and insurance provider.

While applying for the policy, you will be asked about your:

  • Health history (any existing chronic conditions you have)
  • Family’s health history (to evaluate the risk of potential critical conditions)
  • Risky lifestyle behaviors (such as alcohol consumption and smoking)

Also, you will be asked to appear for a medical exam. Then, your premium rates will be determined based on your medical exam results and other information provided by you during the application process. Be honest during the application process, as making false statements can lead to policy denial.

The death benefits of level term life insurance will also remain the same for the entire duration of the coverage. Once your coverage period ends, you can either terminate the policy or renew it at a higher rate.

What Is the Difference Between Level and Renewable Term Life Insurance?

The only difference between the two policies is the varying premiums. With level term life insurance, the premiums remain the same, whereas, in renewable term life insurance, the premium will increase as the policyholder ages or every year.

In the first few years, the renewable term life policy’s premiums will be less than a level term policy. However, as its cost increases every year, over time the renewable term life policy costs more than the level term life insurance.

Why People Choose Renewable Term Life Insurance Despite Premium Hikes?

Renewable term life insurance can be a good option for those who seek coverage for a short period. For example, if a person seeks a better job and wants financial protection against outstanding debts, they may consider renewable life insurance to support them until they get a high-paying job. As the premiums will remain affordable for a few years, the renewable policy is a good choice for the short term.

What If Your Level Term Policy Is About to Expire?

You can extend your coverage for a short period if your policy includes guaranteed renewability, but you may have to pay higher premiums.

Generally, life insurance costs increase as you age, so it is good to buy a policy for the right amount and term length while you are young as then you may get lower rates.

Be Prepared for Tomorrow with Remland Insurance

If you are looking for affordable life insurance in Orange, CA, contact us today at Remland Insurance Services Inc. We are ready to protect your future and support your dependents with our best-in-class coverage.


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