
Why term life insurance rates are lower for younger people
Life insurance tends to be less expensive for younger individuals due to several key factors. First, younger individuals are generally healthier and have a lower risk profile. Since insurance companies assess risk when determining premiums, the lower risks for younger individuals translates to lower term life insurance rates.
While you might think this is a form of age discrimination, it’s really more a matter of statistics. Insurance companies use actuarial tables and statistical models to estimate the likelihood of policyholders passing away during a specific period. These tables consistently show that mortality rates are lower for younger age groups, which is why they offer lower premiums for this demographic.