10 Year Life Insurance Rates vs. 20 or 30 Year Term Rates
Comparing Life Insurance
First let me explain something. I assume that my audience on this website is made up of older adults, and not 25 year olds. Even though we can establish that 10 year term life insurance rates will be lower than 20 or 30 year rates, I am not suggesting that is the right thing for a younger person. First, a younger person is probably very cheap to insure anyway, and also a younger person is probably intending to by a policy for long term plans. The gap in prices, between a shorter and longer policy length, will get larger for older people.
Let me also note that the example figures we use are some general averages for one location. Your own exact rates will depend upon a lot of unique variables. Your age, where you live, the life insurance company, etc. will matter. If you are curious about comparing insurance rates, please visit this page: Best US Term Life Insurance Quotes
Comparing Term Insurance At 50+
Here’s the deal. Even though term is the low cost life inurance alternative, rates will certainly be lower if we choose a shorter length of time to cover. The insurer takes less of a risk that they will actualy have to pay the death benefit. Look at some averages from a third party quoting source.
50 Year Old Male $100,000 Policy (Some Average Annual Term Rates)
- 10 Year Term Rates - $310
- 20 Year Term Rates - $467
- 30 Year Term Rates - $825
You can see that the premiums rise as the length of the contract rises. The older we get, the more dramatic the increase! If we ran these examples for older applicants, say age 55 or 65, the differences would be even larger.
So we are just establishing something that was probably obvious to you anyway. The less risk that an insurer has to take, the less they will charge. This, of course, assumes, all other things are equal.
Now should you always choose the cheapest premiums? No, you should not. It depends upon what your goals are. It may be great to take a cheap $310 premium today, at age 50, but if you need to be covered when you are 60, you will have to accept higher premiums and the possibility that you may not qualify for good rates at all.
As an aside, in the real world, we find it is a bit harder to find 30 year term over 50, though you still can do it.
So why are we looking at decade long policies? Well, sometimes we have short term needs that require a larger amount of coverage, and there is no doubt that term is the way to accomplish this. Let us say you still have a few years left on your mortgage. Another case may be that you have one more child who is still in college. You figure by the end of a decade, these responsibilities will be gone, and you will have less need for a large face value policy.
To cover all your bases, you may want to look for a common policy rider. This allows you to convert your policy to whole life without having to go through the health application again. That way, even if you become less healthy in 10 years, you will have a guarantee you can buy insurance. Note that you will, typically, have to pay more because you are older.
Find your own rates: 10 Year Term Life Rates Age 50 to 75
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