Rates Continue To Diverge With Age

Category: Finance, Insurance.

The price of term life insurance has fallen to historic lows, according to a survey of 25 insurance companies conducted by Insure. com. S. history.

One reason for the decline in insurance rates is the decline in mortality rates: from 2003 to 2004, the age- adjusted death rate dropped 8 percent, from 837 deaths per 100, 000 people to 808 deaths per 100, the lowest level, 000 people in U. Fewer deaths mean fewer death benefits paid by insurance companies, reducing insurer costs and giving the insurer more time to earn money with the premiums it has received. With hundreds of companies offering insurance on the Internet, competition is fierce. Some additional earnings are applied to the bottom line, but others are used to lower rates for consumers, allowing the companies to better compete for new business. This has helped drive prices for term life insurance to new lows. S. life insurance companies with the highest ratings by A. For its study, Insure. com surveyed the twenty- five U.

The companies surveyed had all earned A+ + or A+ (Superior) or A or A- (Excellent) ratings. Best Company, the leading provider of ratings and financial data for the insurance industry. Companies that have lower financial ratings most likely would offer lower premium rates, but the rating company would consider them to less secure financially. And$ 1 million. The survey focused on 10- year, 20- year, and 30- year level term policies with death benefits of$ 250, 000; $500, 000. The lowest rates are available only to those people in good health, with good height- to- weight ratios, who do not smoke. The rates provided were for an example individuals residing in California on November 12, 200 The lowest rate for a$ 250, 000 10- year level term policy was$ 108 a year.

Insurance rates go up with age, so the survey includes prices for people 30 to 70, broken out in five- year increments. The rate was available to 30- year- old men and women. At 35, the rates were unchanged for 10- and 20- year term policies, but went up to$ 250 a year for a 30- year policy. The lowest annual rate for a 20- year policy was$ 15The lowest annual rate for a 30- year policy was$ 22The rates were the same for men and women for those terms as well. Again rates for were the same for men and women. Women actually pay$ 20 a year more for a 30- year, $250, 000 policy- $355 a year, compared to$ 335 a year for men. Rates for men and women diverge at age 40, but not in the direction some people might expect.

The higher rate reflects the risks posed to women by breast and cervical cancer. The increased risk of heart attacks among middle- aged men is reflected in the rates for 45- year- olds. Men and women pay the same for 10- year and 20- year policies: $130 a year and$ 203 a year, respectively. Women and men both pay$ 183 a year for 10- year policies with a$ 250, but men pay, 000 death benefit more for 20- and 30- year policies. Women pay$ 318 and$ 428, respectively. The lowest rates for 45- year- old men were$ 340 for a 20- year policy and$ 520 for a 30- year policy. At age 55, men are paying substantially more than women, due to their shorter life expectancy.

Women pay$ 345, $580, and$ 1, 130 for the same policies, respectively. Men pay$ 403 a year for a 10- year policy, $773 a year for a 20- year policy, and$ 1, 550 a year for a 30- year policy. Rates continue to diverge with age. For women, it is$ 1, 080 year. At 70, the lowest rate, for example for a 10- year policy for men was$ 2, 160 a year. The gender gap increases as death benefits increase. When the value of the policy goes to$ 1 million, men pay more than women for both 20- and 30- year policies: $420 a year for a 20- year policy and$ 710 a year for a 30- year policy.

At 30, men and women pay the same annual premium for a 30- year policy worth$ 250, 00However, 30- year- old men pay$ 70 a year more than women for a 30- year policy worth$ 500, 000- $395 a year, compared to$ 325 a year for women. Women pay$ 370 and$ 565, respectively. The biggest disqualifier is weight. Several factors can prevent a person from getting the lowest possible rates. To receive the lowest rates, a 6- foot man must weigh no more than 198, or 206 pounds, 203, depending on the company that insures him. Cholesterol levels, and family history, blood pressure of heart disease or cancer can adversely affect insurance rates.

A person man weighing just 215 pounds would have to pay 30 percent more than the lowest rate. So can dangerous habits and hobbies, such as tobacco use, and even participation, poor driving record in sports such as motorcycle racing or mountain climbing. Even if a person does not qualify for the lowest possible rates, there are still, however good deals to be found, thanks to the overall increase in life expectancy.