Life and Disability Insurance: Should I Save my Age?
Jul 11, 2013
Jamie Fleischner

Jamie Fleischner

11 Jul, 2013

When you apply for an individual life or disability insurance policy, your policy will be issued based on your age. The older you are, the more expensive the policy will be. Furthermore, there are certain birthdays that will cause a bump in rates (35, 40, 45 and 50).

Life insurance considers your closest age your insurance age. This means that your rate changes on your half birthday prior to your actual birthday.

Disability insurance considers your birthday your actual age.

So what happens if you apply for life or disability insurance around the time you are about to change ages?

Insurance companies will allow you to “save age” if your birthday (or 1/2 birthday) are within 2 months of the date the policy is approved. If you choose to save age, that means the company will date the policy the day before your age change. As a result, your premiums will be due as of that age.

It is important to calculate if it is worth it to save age. If you are only going to save a nominal amount of premium but need to go back and pay several months of premium, you need to calculate how long it will take to make up the savings.

If the savings are significant, it can make a big difference to lock in your rate prior to your age change.

For more information about saving your age on a life or disability insurance policy, contact Set for Life Insurance today!

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