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A long standing urban myth is that life insurance rates take a huge jump at age 50. Actually a spinoff of the myth for those in their 30’s is that it happens at 40, and for those in their 60’s at age 70, and so on. A little know fact is that under age 35 life insurance prices only change every five years (buying new policies). After age 35 the price begins an annual creep upward that gets a little larger each year. Again, I am speaking to the purchase of a new policy. If you have a policy with a 30 or 40 year term, your rate won’t change for that guaranteed level term.

First we’ll do a male in preferred plus health buying $500,000 of 20 year term insurance. The premiums quoted are annual premiums and remember I’m quoting a preferred plus rate class. Most people in good health can get these rates. Even us old folks can qualify for the preferred plus rates.

Age 45 – $555 annually
Age 46 – $601
Age 47 – $652
Age 48 – $707
Age 49 – $769
Age 50 – $836
Age 51 – $909
Age 52 – $994
Age 53 – $1096
Age 54 – $1217
Age 55 – $1352

Would I have rather bought a 30 year term at age 45 than a 20 year term at age 55? Well, not necessarily! With the 30 year term at age 45 you would spend $28,020 on insurance guaranteed to age 75. If you bought the 20 year term at age 55 you would spend $27,040 getting to age 75. The point is the difference between age 49 and 50 is less than $100 a year. There was no grand explosion. The price of life insurance turning age 50 didn’t skyrocket.

And there are mitigating factors as we grow older. Generally speaking as our assets grow and the length of time we need to protect against income loss shortens, the less insurance we should need and it’s more likely we can get by with a shorter term. That person at age 55 might be well taken care of with a 15 year term which would have been $1460 annually. Or maybe they could stagger their coverage with two $250,000 policies, one for 10 years and one for 20 years. That would be $1449 annually and would offer more flexibility and possibly more closely mirror their needs.

The real rub doesn’t come with turning 50. The rub is being male instead of female (except in Montana). Using the same amount and rate class here are the rates for women.

Age 45 – $439 annually
Age 46 – $472
Age 47 – $504
Age 48 – $550
Age 49 – $594
Age 50 – $644
Age 51 – $701
Age 52 – $759
Age 53 – $827
Age 54 – $904
Age 55 – $986

Bottom line. If you think over 50 life insurance rates jump dramatically, well, that’s really not a true reflection of reality. What is really going on is a gradual increase in rates each year that spreads a little wider each year. I’m not saying it’s a pretty picture getting older but there is no one age where prices jump disproportionately.