One of the life insurance “urban legends” has to do with the large jump life insurance rates take when you turn 50, and again at 60, and well, let’s not even talk about 70. The truth is that while the cost per thousand of life insurance does in fact increase with age, it doesn’t take any quantum leaps at any particular point. Rather, it is a gradual increase that just happens to be a little more aggressive with each passing year.
The real swing issues, the one that can truly impact your rates rapidly and drastically, is health and lifestyle, not age. Here’s a clear example. Say my older brother is 65 and in perfect health. He gets regular exercise and always gets checkups either at the health fair or at the doctor. His cholesterol is in check and he’s never had high blood pressure. His height and weight are just where they ought to be. He qualifies for preferred plus rates with any company he wants to apply with, and for $250,000 of 20 year guaranteed level term insurance he is going to pay about $200 a month.
I’m 10 years younger and don’t much like my brother because he and I pay the same premium for the same amount of insurance and the same term length. We’re really identical except that I don’t exercise all that much and have really only had one good checkup in the last 10 years, the one I took when I got my life insurance. And really everything was perfect on the exam…….except my blood pressure was running a little high (always wondered why I got dizzy when I stood up). The average on the exam was 160/95. Seemed a little brutal on the part of the insurance company since it would have only taken an average of 135/85 to get my rate down to $70 per month instead of ‘$200.
The good news is that I took an exam and found out about the blood pressure problem and am now on medication which has brought my blood pressure down to a healthy, normal range. My independent life insurance agent tells me that if I show good control and compliance with my treatment, before long I should be able to get substantially lower rates.
OK. So I made the story up, but the facts are real. The truth is that a healthy 60 year old can get better rates than a 50 year old with a DUI within the past 2 years. A healthy 70 year old can get better rates than someone 60 who smokes. A 75 year old who sees a doctor at least annually for a physical can get insurance at good rates while a 65 year old who hasn’t seen a doctor in 15 years “because he feels just fine” probably won’t find anyone that will give him insurance at all. A diabetic who monitors and controls their diabetes can pay half as much as someone with diabetes who is kind of sloppy about the whole control thing. Someone who has had a heart attack and still smokes, if he can find anyone to insure him, will pay at least 2-3 times more than someone who got the hint and quit smoking.
And my final example, one that truly fits under the “you just can’t fix stupid” heading, a 60 year old who had colon cancer at age 47 and after having part of his colon removed, had never been back to any doctor at all. We can always use guaranteed issue insurance, but that is a good example of someone who could be paying standard rates for traditional life insurance if they had just taken care of themselves. Easily 5 times more insurance for the same cost.
This post is somewhat dated. Life insurance underwriting is changing and evolving continually. For more updated information check out some of the key word links. If you have a specific question or topic you need information for do a search. If you don’t find the answers you need contact me and we’ll make sure you get the information that is important to you.