Do Term Life Insurance Premiums Increase Over Time as You Age?

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“How does age affect my term life insurance premiums?” is the question many policyholders are asking on Google.

It’s the dream of every responsible parent or breadwinner to continue to protect their families or dependents even when they are long dead and buried. In order to do so, they take out life insurance policies to help cover up the cost of all expenses like their funeral, mortgage, education tuition fees, debts, etc.

There are basically two major types of life insurance policies that come to mind when you wish to secure the future of your dependents – term life and whole life. 

While the advantages and disadvantages of term life and whole life insurance policies are glaring, most people are still concerned as to how term life insurance premiums increase over time.

In our previous article, we talked about how your career can affect your term life insurance premiums, but in today’s article, we shall be looking at how age affects it.

What is term life insurance?

This is the type of life insurance that offers you coverage for a specific period of time. What that typically means is that if the person (policyholder) passes on within a timeframe that the policy is active, the insurance company will pay the beneficiary whatever the policy value (payout amount) is.

This payout amount paid to the beneficiary of a life insurance policy is called the death benefit.

The death benefit of a life insurance policy is paid to the beneficiary after the presentation of a death certificate and other basic requirements to help cover different financial needs such as mortgage payments, income replacement, education, or even just the cost of the funeral itself. 

Unlike whole life, term life insurance may not have a cash value associated with it. Check out other benefits of whole life insurance.


What is term life insurance premium?

Term life insurance premium is the monthly or annual payment you make to an insurance company to keep your policy active. This premium is calculated based on your policy’s value, age, career, health condition, and many other factors.

How many years can you get term life insurance?

How many years can you get term life insurance

Typically, term life insurance is always available in lengths of 5, 10, 15, 20, 25 and 30 years. Some insurance providers like AIG, Legal & General America and Protective are beginning to venture into longer terms of 35 and 40 years.

If you get level term insurance for any of these periods, that means you will continue to pay the same premium every year. But this is not common as the increase in mortality rate has forced insurers to limit the length you can get level term life insurance for.


Do term life insurance premiums increase over time?

Should I buy term life insurance with return on premiums

NO, the rates are guaranteed to stay unchanged until the term you originally chose at the time of application runs out. The rates on a new term policy after that if you so choose will greatly increase or you can continue your old term policy IF they offer you a continuation of your old policy at a much higher premium rate.

How does age affect your term life insurance premiums?

It doesn’t matter whether you are seeking a term life or permanent life insurance policy, one of the major factors that influence your life insurance premium rate is age. Typically, the premium amount increases on average about 8% to 10% for every year of age; it can be as low as 5% annually if you’re in your 40s, and as high as 12% annually if you’re over age 50.


Should I buy term insurance with return of premium option?

If you care about maximizing your income and growing your wealth using smoother income vehicles, don’t opt for return of premium option.

Here are some brilliant reasons why you should avoid purchasing a term life insurance policy with return of premium no matter how the insurance agent tries to convince you otherwise.

  • Opting for a term life insurance plan with return of premium because of the additional benefits will increase your actual premium.
  • They only offer it for policy terms between 40 – 50 years. 
  • If you invest the excess premium in another business, you will get more than what your insurance company can ever give you at its maturity.
Editorial Team
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