How Final Expense Insurance Rates Vary by Age
Overview
Final expense insurance, also called burial insurance, is a specific type of life insurance that covers the costs associated with burial and death. These include funeral expenses, burial plot costs, and other related charges. The costs for final expenses do not remain similar in all conditions. They may fluctuate depending on factors, such as the location of the insurance company, level of coverage, and the scope of funeral arrangement. However, this service provides peace of mind to the policyholder and relieves his loved ones from hefty expenses after his demise.
An important factor that affects the cost of final expenses is the age of the insurer. The life expectancy of an individual decreases as he ages, which increases the chances of an early claim. To compensate for this risk, insurance companies raise their premiums for older adults. This may happen to new insurers and those who took final expense insurance previously at a younger age. We will discuss how insurance rates change with age and the plan to minimize the increasing costs.
What is the Final Expense Insurance
Understanding the difference between final expense and other insurance types is the first step before determining the relation of age to burial insurance. In final expense insurance, the payout is smaller than traditional life insurance policies. This policy only covers funeral costs and other end-of-life expenses. Therefore, the insurer of this specific policy usually gets between $5000 and $25000 as a death benefit.
Determining Final Expense Policy by Age
The age of the insurer is one of the key factors that influence rates of the final expense and other life insurance policies. Insurance companies calculate and set their premiums according to the expectation of mortality of a person during the insurance period. As the age increases, the prospects of the insurer dying without completing the insurance policy period increases. Therefore, age-based final expense insurance rates are directly proportional to a rise in the age of the insured person.
Final Expense Rates by Age
Most final expense insurance companies determine the premiums of their insurers according to an age group. These rates generally depend on the age of an insurer and change with an increasing age.
Ages 20s and 30s
Insurance companies offer their lowest premiums to individuals in their 20s and 30s. It happens because these potential insurers have higher expectations of living during the tenure of the policy. Insurance companies consider them to complete the insurance term, which inflicts less burden on them when paying benefits after a claim.
Ages 40 to 50
In this age group, the premiums start to increase due to a combination of many factors. The most critical factors are relatively shorter life expectancy and risks of suffering from diseases associated with age.
Ages 51 to 60
People in this age group usually are in good health. Therefore, many companies offer more competitive rates than those offered to older adults. Their rates are generally slightly higher than younger and middle-aged persons but more affordable than senior citizens. If a 55-year-old person is in good health, then the range of his final expense premium usually falls between $30 and $70.
Ages 61 to 70
The premiums of final expense insurance rise considerably when people enter their 60s. Premiums may increase by 10% to 20% for people in 65 compared to those in their 50s. These people generally pay between $50 and $100 depending on their health and other factors. People who smoke or suffer from chronic diseases usually pay the highest costs associated with this age. Therefore, these people should be extra cautious about their health while applying for the final expense policy.
Ages 71 to 80
Burial insurance rates generally reach their highest for persons crossing their 60s. Insurers consider this age group a high-risk one due to chronic diseases and other age-related issues (death due to falls, accidents, etc.). The average premium rate for insurers of this age group is between $100 and $250. Another issue for people in this age group is that they usually require undergoing medical examinations and questionnaires before getting the insurance. This requirement may also increase insurance premiums.
Ages 81 and above
After crossing 80 years, it becomes difficult for the intended person to get final expense insurance. Some companies may offer insurance at extremely high rates and with strict conditions, while others may reject insurance for this age group altogether. For those who provide insurance for this age group, the premium rates may range from $150 to $300 depending on health conditions, insurance coverage, and other relevant factors. Therefore, the best option is to seek final expense insurance before your 80s.
Other Factors Influencing Insurance Premiums
Age is one of the most significant factors in determining final expense insurance rates. However, other age-related or independent factors influence premiums. The addition of these factors with older age can skyrocket premium rates, making them unaffordable for individuals. These include:
Health Condition
The risk of underlying health conditions rises with an increase in age. Heart diseases, diabetes, and other chronic diseases increase premium rates in both higher and lower age groups. These people may also need additional checkups to verify their stated and other underlying conditions. Sometimes, insurance companies may reject seniors suffering from untreatable chronic conditions.
Lifestyle
Several lifestyle factors increase the risk of health conditions in the future and thus result in higher premium costs. Lack of physical activity, alcohol consumption, and smoking are general factors that are taken into account while determining insurance premiums. For example, smoking and excess drinking can increase premiums several times compared to non-smokers and those who abstain from alcohol.
Gender of Insurer
Women generally live longer than men due to suffering less from chronic conditions, better lifestyle choices (less smoking and drinking than men), and lower rates of accidents. Therefore, insurance companies may offer better premium rates to females due to their longer life expectancy.
Benefit Amount
Another factor that impacts premium costs is the benefit amount an insurer tends to receive after his death. The higher amount of coverage will ultimately result in higher premiums and vice versa. Therefore, it is necessary to estimate your specific needs and financial situation before applying for a final expense insurance policy. This will assist you in avoiding unnecessary premiums.
Reasons to Plan Earlier
We have already provided detailed information about the difference in final expense insurance age rates. These premium rates increase significantly after a certain age and the rate rises further with rising age. Therefore, planning for age-based burial insurance is necessary and has several benefits. The following are the reasons that enhance the significance of planning at the right time for your desired policy:
Lower Premiums
Individuals can get full benefits of burial insurance by getting the policy at a younger age. Unnecessary delaying the process will result in higher costs. Sometimes, older adults also suffer from chronic diseases that increase premiums and may deprive them of their favorite insurance policy at all.
Avoid Medical Checkups
People in their old age usually suffer from chronic diseases. Therefore, insurance companies usually require them to pass several medical checkups and underwritings. Conversely, young applicants are generally in good health conditions and can get lower premiums without facing many conditions and undergoing long and tiring medical undertakings.
Save from Unexpected Costs
Individuals can suffer from unexpected emergencies with time, such as medical conditions or accidents. In these situations, applying for the final expense costs more premiums and the process also becomes lengthy and difficult. Therefore, it is appropriate to apply for insurance as early as possible and avoid unnecessary delay. It provides peace of mind to the insurer and his family.
Alternative Plans
Final expense insurance policies are considered best for many individuals due to their lower premiums, simple application process, and other factors. However, they are not perfect for everyone and some people might find other options better fit according to their needs. The following are the alternative options you can adopt if you miss or want to avoid burial insurance:
Life Insurance Plans
Traditional life insurance plans have strict conditions and higher premiums than final expense plans. However, they also provide higher death benefits. Therefore, it is a better option if you can fulfill their conditions and have a stable economic position.
Prepaid Funeral Plans
You can opt for prepaid funeral plans after paying for your funeral services at the current rate. In this process, you are required to pay the entire price in advance. This is difficult for many individuals but gives peace of mind by increasing premium costs with time.
Saving Accounts
Another alternative method to burial insurance is saving accounts specific for funeral services. These provide flexibility in spending funds for the process.
Conclusion
Age is one of the several factors that determine premium costs for final expense insurance. It is better to apply for burial insurance as early as possible. Otherwise, increasing age makes this process difficult by increasing premium rates, requiring medical underwritings, and prospects of complete rejection by insurance companies.
Latest Post
Burial Insurance Solutions for the Blind | Lifease Health
Explore burial insurance solutions for blind individuals. Understand how vision impairment impacts coverage and find the best policy for your needs.
Burial Insurance for People Living with Fibromyalgia
Explore tailored burial insurance options for individuals living with fibromyalgia. Understand how chronic illness affects coverage & find the best policy to meet your needs.
AARP Life Insurance | Benefits, Coverage Options & Costs
Learn about AARP life insurance, including benefits, coverage options, and costs. Find the right plan to protect your loved ones and cover final expenses.
How Final Expense Insurance Rates Vary by Age
Discover how final expense insurance rates change with age, helping you find affordable coverage options tailored to your specific life stage and needs.
Burial Insurance Options for Individuals with Mental Health Conditions
Explore burial insurance options for individuals with mental health conditions, offering affordable plans and peace of mind for your family’s future.
Do Final Expense Premiums Change Over Time?
Learn whether final expense insurance premiums change over time. Explore how age, health, and policy terms impact your premium rates.
What Happens If You Die Without Life Insurance?
Understand the financial and emotional impacts of dying without life insurance.
Burial Insurance for People with Chronic Pain Conditions
Find affordable burial insurance options for people with chronic pain conditions and ensure coverage for final expenses despite health issues.
Cost of Cremation vs. Burial | Which Option Is Right for You?
Explore the cost of cremation vs. burial to make an informed choice for your end-of-life planning and ensure peace of mind for your family.
Final Expense Insurance | Reducing Financial Risk in Retirement
Learn how to find burial insurance options for those with high blood pressure. Get tips on coverage, eligibility, and securing your family’s future.
fAQs
We Are Here To Help With Your queries !
Age affects the cost of insurance premiums due to health and other factors associated with older persons. It increases death expectancy and reduces the chances of completing the insurance period.
Many companies provide burial insurance for people aged 80 and above. However, their premium charges are considerably higher than the costs they charge for relatively younger people. These costs may increase further if the insurer has chronic conditions.
Yes, there are several alternatives that provide features not available with final expense insurance. These include traditional life insurance, saving accounts for funerals, and prepaid funeral plans.