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Determining term life insurance rates for seniors

Term life insurance rates typically tend to be higher for older applicants. There are a couple related reasons why this can be the case:

  • Older applicants for life insurance — when compared to younger applicants — may have a shorter life expectancy at the time they apply.
  • An older applicant for a policy typically has a higher probability of passing away while the policy in is force, compared to younger applicants.

In fact, term life insurance rates can increase by up to 12 percent for each year of an applicant’s age over 50.¹

So what does this mean for older applicants? Are term life insurance rates simply unaffordable for most seniors?

Not necessarily. Age is just one of the factors that affect term life insurance rates, and seniors may still be able to find a policy that works for their budget. Let’s break down the other variables that can affect term life insurance rates for all people, especially older adults.

What affects term life insurance rates for seniors

  • Health
    Aside from age, an applicant’s health status — both past and current — is among the biggest factors that can influence the term life insurance rates available to them. An older applicant may suffer from some of the age-related health issues that can drive up some life insurance premiums, such as diabetes, high blood pressure or high cholesterol.

  • Family health history
    An applicant’s family health history may also be taken into consideration when calculating term life insurance rates. A family history of conditions like cancer or heart disease can lead to increased premiums because the applicant may be judged by the insurance company as a higher risk to insure.

  • Tobacco use
    Tobacco use is often a major consideration when it comes to determining term life insurance policy rates. Tobacco users have a mortality rate about three times higher than that of nonsmokers, which presents an increased risk for a life insurance company.²

  • Lifestyle
    Your lifestyle, occupations and hobbies can affect your potential term life insurance policy premiums. Those who engage in more dangerous activities such as race car driving or skydiving can often expect to pay higher premiums because they may be seen as riskier to insure.

  • Driving record
    An insurance company may review an applicant’s driving record to learn if the person carries an increased potential risk to insure. Violations like speeding tickets, DUI’s and at-fault accidents can give an insurer a glimpse into how the applicant lives their life both on and off the road.

    Luckily for older adults, age has been shown to have little to no correlation with one’s driving record.

  • Gender
    Women are expected to live a full five years longer than men: 81.1 years vs. 76.1 years.3 This means they can typically expect to pay a little less for their life insurance.

  • Amount of coverage
    The amount of life insurance coverage you purchase can impact the premium rates that are offered to you. An older life insurance applicant may likely need a lower coverage amount than a younger person if they no longer have financially dependent children living at home or if they have paid off their mortgage.

Many seniors may also have retirement savings and investments in place, which means they may not need as much term life insurance coverage as a younger applicant.

Buying term life insurance as a senior

Age can be just one of the many factors that influence term life insurance rates. A senior who is in good health, does not smoke and does not need an excessively large amount of coverage may very likely be able to secure a term life insurance policy that’s affordable for them.

Call 800-390-3019 to learn about term life insurance at AIG Life Insurers.

Guaranteed issue whole life insurance can be an additional option

If you’re an older adult who wants to avoid the medical underwriting process as part of your life insurance application, another option you can consider is guaranteed issue whole life insurance. This type of life insurance policy does not require any medical underwriting, and all applicants are guaranteed to be approved if they are within a specified age range. The person’s policy rate is based upon their age and gender.

Coverage is subject to receipt of payment and verification of identity as required by law and is effective upon receipt of policy. Learn more by speaking to an AIG-appointed life insurance agent at 888-428-8870.

1How Age Affects Life Insurance Rates, Investopedia, November 2016
2The Health Consequences of Smoking—50 Years of Progress. A Report of the Surgeon General
3NCHS, National Vital Statistics System, Mortality, December 2017

Agency services provided by AIG Direct Insurance Services, Inc. ("AIG Direct"), CA license # 0B57619 and AR license # 0100105378, a subsidiary of American General Life Insurance Company ("AGL"), Houston, TX and an affiliate of The United States Life Insurance Company in the City of New York ("US Life"), New York, NY, all members of American International Group ("AIG").


Policies issued by: American General Life Insurance Company (AGL), Houston, TX. Policy Form Numbers ICC16-16901, 16901, ICC16-16900,16900, ICC15-15532, 15532,15532-5, and 15532-10, except in New York, where issued by The United States Life Insurance Company in the City of New York (US Life), Policy Form Numbers 16901N and 16900N. Issuing companies AGL and US Life are responsible for financial obligations of insurance products and are members of American International Group, Inc. (AIG). Products may not be available in all states and product features including rates may vary by state. Guarantees are backed by the claims-paying ability of the issuing insurance company. © 2018. All rights reserved.


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