What's the Cutoff Age for Life Insurance?

If you're inching toward that milestone age of 50-years, you may believe the cost of buying life insurance once you've reached that magic number will increase substantially - some believe as much as 50% or more. This isn't true. While it's true that life insurance does become more expensive as you age, it does so at a somewhat consistent basis.

As a rule of thumb, insurance premium rates are most affordable for individuals aged 20-30 years, assuming you're a non-smoker in good health. For those in that age group, premium costs rise very little from year to year. Once you're into your thirties, rates start increasing regularly and when you're in your 40's you'll see even more substantial increases, even if you're still in good health. Costs will increase to even higher levels if you suffer common health issues that will prevent you from qualifying for a preferred rating. Some of these could include:

• Weight gain
• Increased cholesterol numbers
• Increased blood pressure
• Hypertension

Who Really Needs Life Insurance Later in Life?

There are a variety of reasons for purchasing life insurance, with the main reason being to provide security after you're gone to those currently dependent upon your income. Many individuals get their first insurance policy when they get married and start a family, which typically happens when they're in their 20's or 30's. With couples now having children later in life, however, it's conceivable that you may have dependents counting on your income well into your 60's. You may also have outstanding debts such as a large house payment or substantial car payments that you're reluctant to saddle your loved ones with when you pass on.

No matter what your age, if you have financial responsibilities and/or dependents relying on your current income that would be curtailed should you suddenly die then an investment in life insurance makes good sense.

What's Available?

There are two major types of insurance – temporary (term life), and permanent (whole life). Term life provides higher death benefits at lower premium rates and policies are written for a specific period of time (term). If you pass on during the set term, death benefits will be paid to your beneficiary. Although cutoff ages to qualify for term coverage vary from company to company, here are some typical figures:

• 10-year term, age 80
• 15-year term, age 75
• 20-year term, age 70
• 25- or 30-year term, age 55