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Buying life insurance is different at every stage in your life. We always say that if someone you care about is financially dependent on you, then life insurance makes sense.
However, those financial dependencies can be different at you age. Also, the older you get, the more expensive life insurance becomes.
Below are a few insider tips to keep in mind when purchasing life insurance that has to do with your age and also some general advice based on your age.
Tip #1: Age Nearest vs Current Age
Most life insurance companies use “age nearest” to determine your age. This means that when you place your life insurance policy in force and you’re within 6 months of your next birthday, they’ll actually determine your rates as if you are 1 year older. Which effectively means your rates will be more expensive.
Keep in mind that the underwriting process can take 4-8 weeks. So even if you’re 8 months to your next birthday, there could be a surprise increase in rates when your application finally gets approved - solely based on you being nearest to your next age.
However, some life insurance insurance companies use your current age to determine your age. Which means that as long as you place your life insurance in force before your next birthday, your rates will remain the same.
The instant quotes you see on our website are all based on today’s date - so please keep that in mind.
If this is confusing or if you have any questions, please don’t hesitate to call. I wouldn’t concern yourself with this until you’re ready to apply for coverage. Make sure when you apply that you ask your agent if your birthday will effect your rates when your policy is approved. I hate to say it, but many life insurance agents overlook this (we don’t, it’s part of our quoting process).
Tip #2: Backdating to Save Age
Let me preface this tip by saying that age is an obvious factor in pricing your life insurance - so it’s important to keep your age as low as possible when your policy is issued.
If you just had a birthday or your “age nearest” just passed (as described above), we can backdate your life insurance policy to give you rates at your previous age.
BY LAW, you can backdate any life insurance up to 6 months in order to get a lower rate.
Backdating simply means choosing a date that has passed in order to secure a lower rate. In order to do this, you’ll have to pay for premiums between that date you choose (usually 3 days before your age change) and the current date.
So when backdating you have to weigh whether it’s worth it or not. Are the savings significant enough over the span of the policy to essentially “buy up” your previous age? We’ll do these calculations for you and help you make a decision.
Depending on your unique situation, it may not always be best to backdate a policy. You really don’t even need to consider backdating to save age unless you’re in your 40’s, 50’s, 60’s or 70’s. The premium savings in your 20’s and 30’s will be miniscule.
Again, if this is confusing or you have any questions, please don’t hesitate to contact us.
Life Insurance in your 40s
In your 40’s you’re most likely building your net worth and have assets to protect. Many of our clients in their 40’s purchasing life insurance from us are building up their cash reserves, reducing their debt, increasing retirement savings and sometimes saving for college tuition for their children. All of these are huge burdons to leave your family in your untimely passing, so life insurance is there as that safety net in case the worst happens.
Many people in their 40’s are purchasing life insurance terms until their projected retirement - so usually 20, 25 or 30 year term life insurance policies which are typically very inexpensive still if you’re in average or better health.
If you’re in your 40’s, we’ve written some age specific life insurance articles for you:
40 years old
41 years old
42 years old
43 years old
44 years old
45 years old
46 years old
47 years old
48 years old
49 years old
Life Insurance in your 50s
Your 50’s are typically your peak earning and savings years. If you have kids, they’re typically grown and on their own. At this point in time, many of our clients are tackling big debts to pay off before retirement combined with getting more serious about working toward retirement goals.
A lot of people in their 50’s who don’t have a lot saved up for retirement (most don’t) are looking at term life insurance policies that expire at their projected retirement or burial policies to take care of any final debts and burial costs.
It appears that many people entering their 50’s are restructuring their life insurance programs as they make these big moves towards retirement and on the more emotional side, start to see more of their friends and family’s health start to deteriorate.
Life insurance planning becomes a lot more serious in your 50’s as rates start to increase significantly each age that passes by:
50 years old
51 years old
52 years old
53 years old
54 years old
55 years old
56 years old
57 years old
58 years old
59 years old
Life Insurance in your 60s
These are also your peak savings years where you’re determining when/if you can retire. Although studies show that 40% of people in their 60’s are forced into early retirement because of health or employment issues and many taking care of elderly parents.
We find many people in their 60’s are downsizing and working out their estate plans. Life insurance is usually a payment you don’t want to add because of everything going on, but at this point in your life you just can’t leave your loved one’s financially burdened at the most crucial times in their lives.
We know you’re extremely price sensitive to life insurance and finding some coverage within your budget is typically the highest wishlist item when purchasing coverage. We’ll make sure we find something you can afford to pay comfortably through retirement if needed.
The most important thing to understand is that you can’t put off purchasing life insurance any longer if it’s important to you. Every year you wait, the costs increase more than ever before.
Many people in their 60’s purchase what we refer to as a final expense policy or a life insurance policy that covers burial costs and any outstanding debts. These are smaller life insurance policies where no medical exam involved (just paperwork) and they take people with higher risks.
For more specific information, we wrote the following articles based on your age:
60 year old
61 year old
62 year old
63 year old
64 year old
65 year old
66 year old
67 year old
68 year old
69 year old
Life Insurance in your 70s
At this point you’re either nearing retirement or are 100% retired. You’re most likely living on a fixed income determined by your savings. If you don’t already have your life insurance program in place, the need for life insurance usually arises for estate planning reasons or covering final expenses.
Life insurance will be expensive at this point in time compared to previous years and the cost of waiting to purchase life insurance just makes costs worse. The advice we like to give is that no matter where you are, it’s never too late to purchase life insurance IF you can afford it. Some coverage is better than no coverage.
If it’s too expensive, it may also make sense to speak with any loved one’s that might be able to help you pay for the premiums. After all, they’re the one’s that will be burdened if anything were to (god forbid) happen to you unexpectedly.
Everyone's situation is different. Age is just one factor in the overall cost of your life insurance.
If you got this far in the article, the biggest takeaways are:
1. Factor in your age nearest/current age situation (we'll do that for you) when looking for life insurance rates. If there's an opportunity to save you money, we'll consider backdating to save age.
2. You can get instant life insurance quotes based on your birth date by filling out the form on the right. It factors in age nearest/current age, but it's based on today's date. Your actual rates will be based on your age when the policy issues.
If you have any questions about purchasing life insurance, please don't hesitate to contact us.