Beware! Your Term Life Insurance Rates Will Double in 20 Years

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Jun 27, 2024, 10:19 ET

TAMPA, Fla., June 27, 2024 /PRNewswire/ -- A recent report on term life insurance quotes published by QuickQuote.com revealed that a 20-year term life insurance policy for a 25-year-old is less than half the cost of the same policy for a 45-year-old.

Getting the longest available term life insurance policy when a person is young can save them thousands of dollars in premiums in the long run.

Life Insurance Premiums and Age

Life insurance premiums are based on a person's risk. Age is one of the biggest risk factors, since the older a person is, the higher their risk of death and the insurance provider paying a death benefit.

That's why a male can purchase a 20-year, $500,000 policy for $35 a month as a 25-year-old, but someone 20 years older would pay $79 a month.

The older someone becomes after 45, the drastically more expensive it can be to purchase a term life insurance policy, to the point where it's not worth the premium.

Demographic Needing Term Life Insurance

Another reason for people to buy term life insurance while they're young is that is when the safety net is most necessary. People in their 20s and 30s tend to have more debt than assets. If an individual purchases a home, they will likely owe the mortgage lender the majority of the home's value.

People in their 30s and 40s tend to have the most dependents. Without their parents' or guardians' income, children don't have the resources to pay for their lifestyle.

Debt and dependents necessitate term life insurance, which is the most cost-effective type of life insurance.

Risk Factors for Life Insurance Besides Age

While age is one of the biggest determining factors for life insurance premiums, there are several other factors related to risk, according to QuickQuote.com:

Age
Gender
Height/Weight
Medical History
Occupation
Tobacco use

Melanie Musson, a nationally recognized life insurance expert with QuickQuote.com, explains, "Insurance providers use risk factors to balance an individual's desire for coverage and the insurance company's need for profitability." An insurance company that goes bankrupt can't pay claims.

Read QuickQuote.com's entire report here: Term Life Insurance Quotes.

SOURCE QuickQuote.com