Keep Your Life Insurance Policy Affordable As You Get Older
Many older Americans, particularly those over 65, struggle to find the most affordable life insurance. This is often due to how much risk older people pose to the insurance company. Risk is a tricky subject to understand, and some are beyond a person’s control. But, older people can still take steps to keep their risks low.
Why Policies Cost More as You Age
Life insurers use risk to as one factor that determines eligibility for coverage. Generally, someone’s risk is how likely they are to file an insurance claim, requiring the insurer to pay. Those with higher risks are likely going to pay more for their coverage or have fewer policy options. Since life insurance payouts originate when someone dies, someone's life expectancy often plays a big role in how much risk they pose. Let’s take a look at a couple of examples.
Those over age 65 are likely more aware of their mortality. After all, in a simple world, a 65-year-old is closer to death than a 25-year-old. It’s something everyone, including life insurers, recognize. Therefore, the older you get, the more likely you are to pay higher prices for your coverage.
Not only can age play a factor in coverage eligibility, so can health. Someone's medical conditions might increase their likelihood of early death. Therefore, as older people develop health problems, they might shorten their life expectancy. This factor might add to someone’s risk profile, making them a more challenging subject to insure.
Techniques to Get More Affordable Coverage
Even as your age goes up, you shouldn’t get pushed out of affording life insurance. You can make responsible moves to ensure that you qualify for affordable coverage.
- Do your best to maintain your overall good health. A healthier individual likely gets a better risk rating than someone with a lot of illnesses.
- Enroll in your coverage as early as you can. Every passing year will bring you closer to death. The sooner you get insurance, the more likely you are to pay a lower premium.
Don’t forget to work with your life insurance agent to compare the policy options available to you. They can likely compare the policy rates and options offered by various insurers. This can help you pinpoint effective life insurance while also getting a policy with the best costs. When you have choices, you’ll feel much more secure choosing the best one.
If you are 65 or older and ready to enroll in Medicare, this is a must read - What do I need to Enroll in Medicare?