WOW Articles

It will come as a surprise to no one that term life insurance prices and life insurance costs in general are in large part determined by the insured clients' age. Looks like a easy enough calculation, right? Not when it comes to insurance underwriting it isn't! Possibly it is the nature of large organizations to have to complicate the obvious, but, that is the society we live in and you'd best know just how your life insurer is determining your age so you don't pay more than you need. Here is a easy description that will help you comprehend the best time for you to submit an application for your term life coverage

Insurance company underwriters use two definitions when speaking about a clients' age: Attained Age and Nearest Age. You need to know both definitions when going over rates with your insurance agent, and understand how the procedure being employed by your insurer affects your costs.

The "Attained Age" approach for computing your age is the basic, no nonsense answer to the age-old question you have been replying to since you were a child, "How old are you?" It is your present age, in years, based upon your birthday. For instance, a person who is 34 years and 5 months old would be classified as a 34-year old, as would a person who is 34 years and 7 months old. Adds up, right? It is common to human culture and anyone gets it so it would seem sensible to use it when figuring out how old a person is for term life insurance. It just so happens that this is the very least used process used by insurance companies to choose their clients ages.

To make life interesting, the majority of life insurance companies employ the "Nearest Age" technique to determine the proposed insured's payments. This method takes into account whether or not the proposed insured is closer to his/her last birthday or his/her next birthday. For instance, a person who is 34 years and 5 months old would be categorized as a 34-year old for the premium calculations. Nonetheless, a particular person who is 34 years and 7 months old would be classified as a 35-year-old for the rate computations.

Knowing the differences should enable you to "time" your insurance application in order to make the most of the potentially lower premiums you could obtain by purchasing your life insurance at the suitable time. Keep this final tip in mind: Putting a policy in place before your "next birthday" does not assure you the lowest term life rates.