How Does Age Affect Life Insurance Rates?

3 minutes can save you hundreds. Enter your age below and join thousands of Canadians saving on insurance.

Secure. No Spam. No Fees.

Why You Can Trust MyChoice

MyChoice serves as an independent intermediary between you, financial institutions and licensed professionals without any additional charge to our users. In the interest of transparency, we disclose that we partner with some of the providers we write about – we also list many financial services without any financial gain. MyChoice does not operate a financial institution or brokerage and to ensure accuracy, our content is reviewed by licensed professionals. Our unique position means that we hold no recurring stake in your policy, ensuring our mission to help Canadians make better financial decisions is free of bias or discrimination. 

Article Contents
By <span>Matthew Roberts</span>
By Matthew Roberts

Updated on December 14, 2023

Visit author page
By <span>Matthew Roberts</span>
By Matthew Roberts

Updated December 14, 2023

Visit author page

3 minute read

Article Contents
How Does Age Affect Life Insurance Rates

Many individuals might have a rough understanding of the potential costs of life insurance. Yet, the various elements that insurers evaluate to set premium rates might be less widely known. One important question that often comes up when considering life insurance is – “How does age affect life insurance rates?” Understanding this aspect is vital for anyone looking to secure their family’s financial future. In this detailed guide, we delve into age’s critical role in shaping life insurance premiums and identify the stages of life when these rates typically increase.

How Does Age Affect Life Insurance?

The pace of population ageing is much faster than in the past. Canada is no exception to the trend. According to Statistics Canada, from 2016 to 2021, the number of Canadians aged 65 and older rose from 18.3% to seven million, constituting 19% of the population. Population projections indicate that by 2051, almost one-quarter of the population could be 65 and older. It’s well-known that we become more prone to various health issues as we age. Statistics show that over one-third of seniors have two or more chronic diseases. However, even for people who are not yet considered seniors (less than 65 years old), health seems to be slowly declining, with only 58% and 50.9% evaluating it as “good” at the age ranges of 35-49 and 50-64, respectively. The risks that come with age are a good reason for many to consider investing in life insurance.

Life insurance represents an agreement where an individual pays premiums to an insurance company, which in turn commits to providing a specified sum of money to a chosen beneficiary upon the death of the insured individual. The cost of this premium is influenced by several factors, with age being one of the most significant. The main ways in which age could affect your premiums are:

  • Risk Assessment: Insurance is all about assessing risk. Statistically, the older you get, the higher the risk of passing away. This increased risk leads to higher premiums as you age.
  • Health Considerations: Health issues often come with age. Older individuals tend to have health conditions that could increase their risk of death, thus increasing the cost of insurance.
  • Length of Coverage: Younger individuals are likely to pay premiums over a more extended period, reducing the annual cost. In contrast, older individuals have a shorter time to contribute, leading to higher annual rates.

At What Age Does Life Insurance Go Up?

Life insurance rates typically start to increase more noticeably as you enter your 30s and 40s. However, the most significant jumps in premiums are often seen as individuals enter their 50s and 60s.

Age Impact on Term Life Insurance vs. Whole Life Insurance

  • Term Life Insurance: This type is purchased for a specific period (e.g., 20 years). Younger individuals will find more affordable rates due to lower risk. Rates increase with age, especially for new policies taken out at an older age. Consider this scenario: Choosing a 20-year term policy when you’re 30 might result in an annual premium of approximately $250 until the term concludes. Yet, if you decide to renew the policy for an additional 20 years at the age of 50, the annual cost could rise to $500 or more, reflecting the higher risk factors associated with your increased age.
  • Whole Life Insurance: Unlike term life, whole life insurance covers you for your entire life. Premiums are generally higher than term life but don’t increase with age once the policy is implemented. Securing whole life insurance at the age of 30 can significantly reduce your premiums, potentially saving you thousands of dollars compared to initiating a policy at 50 years old. Whole and term life insurance have many differences and nuances; we have an article to help you understand them better.

Factors Affecting Life Insurance Premiums Beyond Age

Insurance companies determine your premium rates based on the level of risk you present. While age is a key factor, other elements also play a role in determining life insurance premiums:

  • Health and Medical History: Pre-existing conditions such as diabetes, overall health, and family medical history can influence rates.
  • Lifestyle Choices: Smoking, alcohol consumption, and engagement in high-risk hobbies and activities can increase premiums.
  • Occupation: Jobs with higher risks can lead to higher insurance costs.
  • Gender: Statistically, women tend to live longer than men, sometimes resulting in lower premiums for women.
Factors Affecting Life Insurance Premiums

Age Limits in Life Insurance: Can I Be Denied a Policy?

Life insurance companies set maximum age limits for issuing policies: term life is usually up to 75 years, with shorter coverage periods as you age, and whole life is often available until around 85. Seniors might consider guaranteed life insurance, available up to 75 years, even with high-risk factors. Remember, insurers vary, so a denial from one doesn’t rule out finding a suitable policy elsewhere. Always consult a broker for more options.

Tips for Managing Life Insurance Costs as You Age

  • Buy Early: Purchasing life insurance at a younger age can lock in lower rates.
  • Maintain a Healthy Lifestyle: Staying healthy can help keep premiums lower.
  • Review and Adjust Coverage: As life circumstances change, so should your coverage. Periodically reviewing your policy can ensure you’re not over-insured.
  • Compare Policies: Shop around and compare different insurance providers to find the best rates.
Tips for Managing Life Insurance Costs as You Age

The Bottom Line

Age significantly impacts life insurance rates, with premiums generally increasing as one gets older. Understanding this relationship can help you make more informed decisions about your life insurance needs. Remember, the best time to buy life insurance is when you’re young and healthy. Still, it’s never too late to start as you can benefit from it at an older age. Taking into account factors like your age, health status, lifestyle choices, and financial objectives, you can select a life insurance policy that offers both tranquillity of mind and financial stability for your family.

Congratulations! You made it to the end!

Now, here is the easy part: complete your quote in under 2 minutes

Discover More About

Learn about the concept of life insurance trusts, their utility, structure, and the strategic considerations involved in their establishment.
Learn about the details of cremation costs in Ontario, how to choose the right service, and whether life insurance can help cover the expenses.
Dive deep into the circumstances where life insurance claims in Canada may be denied. Read on to learn more.