As long as we’ve been involved with life insurance, which puts us in the over 50 and at least one over 60 age categories, turning age 50 has been blamed for everything from being declined for life insurance to prices and assumed risk quintupling if that’s a word. While we would be the last to tell you that life insurance just gets cheaper as you age, the idea that age, any age is cause for alarm as you approach is far more urban myth than fact. But it’s a prevalent urban myth since we get calls from prospective clients all the time who are suddenly ready to look at this life insurance thing because they’ll be turning 50 soon, or because they’ve heard you can’t get insurance after age 60 or 70. Never mind they should have had it in place before, but whatever it takes to help people understand mortality risk covers premature death as well as those that live long lives.
So, if someone is healthy and buys life insurance at age 49, do they get a better deal than if they go ahead and turn 50? Absolutely! Just like the difference between buying at age 48 versus 49, or 50 versus 51. Each year that passes brings an increase and the older you get the larger the year to year increase, but until you start getting quotes as you approach age 80 you’re not going to sense any alarm on the part of the life insurance companies. Let’s be clear that we aren’t suggesting it is prudent to wait another year for two reasons, premature death and health changes. Pick whatever age you want, say age 50 and $250,000 of 20 year term at the best rate is going to cost around $500 annually. If you put it off to age 51 and your health is still wonderful it goes up a bit to $540 a year, but remember those rates are guaranteed to remain level for 20 years so you’ve left some money on the life insurance table but you haven’t blown it big time. But what happens if you delay buying life insurance for that same year and during that wait you are diagnosed with type 2 diabetes. In general the best life insurance rate class you will qualify for with well controlled type 2 diabetes is going to be standard, so that one year delay would skip right by $540 a year and go to around to about $1000 a year. When you start leaving $20,000 on the life insurance table because you waited another year, well, you screwed up.
So when is the best age to buy life insurance? Two answers are appropriate. While you’re healthy is always a good choice because that ensures you the best opportunity to get the lowest rates and lock them in for as long as you believe you’ll need them, whether that is a 20 or 30 year term or a term life insurance to age 100 or even 121. If you have health issues, get life insurance as soon as you can, preferably with a well controlled impairment.
Do we think too much is made of age as it factors into your consideration of when to buy life insurance? Probably yes! Life insurance purchases should be driven by need and responsibilities, not age. The idea isn’t to see how long you can get by without it, but to have it in place as soon as you recognize a need, whether that is family protection or for business life insurance purposes. What we do think is ignorantly poo pahed is the potential for your health to change. Look, life insurance is inexpensive, especially when you buy it in good health. Do it and know you’ve made the right decision. Call or email if you have any questions. We can help.
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