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Age

A person’s age absolutely plays into the mortality risk equation, but it’s also the source of one of the
most prolific misunderstandings of life insurance underwriting. If you asked a large group at what one
age life insurance rates jump the most I suspect you find that 85% to 90% believes it takes a devastating
jump at age 50. At Risk Life we field the question on a regular basis, especially from those in their late
40’s.

What clients are worried about is the cost of waiting and more than age, health is culprit that can
suddenly make your insurance cost more. First let’s put some perspective on the age myth. The
following are actual rates at preferred rates for $500,000 of 20 year term. And before anyone cries foul,
yes, preferred rates or even preferred plus rates are attainable at age 50 or 60 or 70 or even 80.

1. Age 45 = $63.51 a month
2. Age 47 = $75.26
3. Age 48 = $81.77
4. Age 49 = $88.23
5. Age 50 = $96.57
6. Age 51 = $105.71
7. Age 52 = $115.71
8. Age 60 = $257.92 (10 year $136.30)
9. Age 65 = $512.35

Those last two will get your attention, but if we filled in the missing years what you see is just an
incrementally increasing cost per thousand. If a person wanted to nail down a time in their life when
rates start triggering your gag reflex, keep in mind that the average life span is 78 years in the US.
Anytime you start guaranteeing level rates beyond average mortality the increments become larger.

Prudence dictates that it’s better to purchase life insurance when you first have the need (married,
children, etc) than to wait. A health change could easily double or triple the rates above and when you
are diagnosed with, say, diabetes, it doesn’t wait for your next birthday to impact the rates you pay.