How Age Affects Your Life Insurance and Mortgage Protection

How Age Affects Life Insurance Quotes

Birthdays are important because age is the one thing that will always increase the cost of your cover

You might say:

But what about smoking?

I say:

Good point but you can always quit and make yourself a non smoker 👌

You can’t make yourself younger.

Or can you?

Backdating your life assurance or mortgage protection

With every birthday, age affects life insurance, resulting in higher premiums.

But you can avoid this by backdating your policy.

It’s a totally legit way of reducing the cost of your cover.

How does backdating work?

All other things being equal, the older you are, the more likely you are to die before a younger person.

Thus, older people represent a bigger risk of a claim to the insurer.

So, the insurer will charge older people a higher premium for life insurance than younger people.

A 30-year-old pays more for her cover than a 29-year-old, a 44-year-old pays more than a 43-year-old and so on.

Some examples of how you age affects life insurance quotes:

Let’s quote Brian for €250,000 over 25 years.

A 29-year-old will pay €14.21; a 30-year-old will pay €14.83 for the same cover. That’s a 5% increase.
A 39-year-old will pay €24.45; a 40-year-old will pay €26.70. That’s a 9% increase.
A 49-year-old will pay €62.71; a 50-year-old will pay €70.22. That’s a 12% increase

Imagine Brian turned 50 on the 18th of June.

Today is the 26th of June.

We can change the start date of his policy to June 1st, turn back time, and make him one year younger.

Brian now qualifies for a lower rate.

Backdating isn’t free.

Brian must pay June’s premium, but in the long term, he will save by locking in the lower price for his policy term.

How far back can you backdate life insurance premiums?

Three months is usually the longest the insurers will allow.

So if you have had a birthday in the last three months, you may be able to get a lower price.

Some insurers will backdate to 6 months, but this is case-by-case.

Let me know if you’d like me to look into it.

How much will I save if I backdate my mortgage protection?

Backdating mortgage protection works in the same way. To calculate how much you’ll save:

Get two mortgage protection quotes. One for your current age, make yourself one year older and requote.
Take the smaller number from the bigger one.
Multiply the answer by 12.
Multiply this by the term (years) of your policy.

Using the example above, here’s the maths.

A 49-year-old will pay €62.71, and a 50-year-old will pay €70.22. (12% increase).
€7.51
€90.12
€90.12 x 25

You can save €2253 by backdating your policy.

Not too shabby, eh?

Age affects life insurance when it comes to medical requirements, too.

The older you are, the stricter the life insurance underwriting is.

If you’re 49, you might get cover based on an application form alone.

However, the insurer may request a medical screening for a 50-year-old.

The medical could affect your premium if the medical screening reveals a health condition you were unaware of

Unfortunately, you can’t backdate your age to avoid a medical.

You can only plan by applying before you hit a milestone age.

Whole of life insurance versus term life insurance

Hi Nick, I’m looking for life insurance but I’m confused and don’t know whether to go for the whole of life cover or normal, is it term life cover? What’s the maximum age for life insurance anyway? Cheers! Linda

I received this question a few months back, and we get asked it often because life insurance costs vary with age.

What’s the maximum age for term life insurance today?

You can buy a policy that covers you until you hit 91.

What is the minimum level of cover?

Zurich: €5000

Royal London: €10000

Aviva: €12000

But what if I live past 90?

Congratulations, old-timer!

However, as you have outlived your policy, the insurer will pocket your premiums as payment for providing the promise to pay your claims had you passed.

Lovin the alliteration in that sentence.

The only way to guarantee your policy pays out eventually is with whole-of-life assurance.

Does whole life assurance cost more than term life insurance?

Let’s take a 50-year-old man looking to put €10,000 life insurance in place to pay for his funeral.

With Zurich, €10,000 40-year life insurance costs €10 per month.

€10,000 whole of life assurance cost €14.72

If you need it for funeral expenses, always go for whole life assurance rather than term life insurance.

What’s the oldest age at which you can buy term life insurance?

75

What’s the oldest age you can buy the whole of insurance?

Also 75.

The same rule applies to S72 inheritance tax life assurance.

Over to you…

Are you considering life insurance with a birthday fast approaching?

Have you just celebrated a birthday?

Let me show you how to backdate your policy.

With my help, you, too, can be Dorian Gray.

Even if it’s not your birthday, but you’d like me to recommend the types of cover you need based on your current situation, fill out this questionnaire, and I’ll be right back.

Or you can request a callback here.

Thanks for reading

Nick

Editor’s Note | We first published this blog in 2016 and have regularly updated it since.