How To Calculate Your Life Insurance Age [2024]

Your age is important when it comes to buying a permanent life insurance policy or one of the different types of term life insurance. The majority of insurance companies will use your half-birthday rather than your actual age. Knowing your insurance age will help you understand how insurance companies calculate rates.

Read on to learn how to calculate your half-birthday age and actual age and what other factors will affect your life insurance rates.

Calculating Your Life Insurance Age 

Insurance companies calculate life insurance rates by age & gender to come up with one of two metrics. We’ve outlined both of those metrics below so you can determine your insurance age. 

Actual Age in Life Insurance

If the life insurance company uses customers’ actual age to calculate rates, then determining your age is easy. Your actual age is the age based on your last birthday. So if you are 55 years old, your actual age is 55 until your 56th birthday. 

Generally, cheap life insurance companies tend to use your actual age to calculate lower rates, as rates become more expensive as customers age. Using your actual age means you get the most accurate rate possible. 

Half-Birthday Age in Life Insurance 

More commonly, life insurance companies will use what is called your half-birthday or nearest birthday to calculate your life insurance rates. These are common life insurance terms and are when a life insurance company calculates your age based on whichever birthday is closest. 

For example, if your 56th birthday is closer on the calendar than your 55th birthday, your insurance company will enter your age as 56, even though you are still 55. So once you pass the six-month mark from your last birthday, you will be aged up a year on your life insurance premiums.

The majority of life insurance companies will use your half-birthday to calculate your life insurance rates. Unfortunately, this can significantly increase your life insurance rates, which we will explain in the next section. 

Why Using Half Birthday as Your Age Increases Prices

Life insurance premiums increase a small percentage each year, which is why older customers will see their rates increase drastically compared to younger clients. Prices can increase up to hundreds of dollars in between purchase dates that are a few months apart. For example, a 55-year-old could pay a few hundred less right after their 55th birthday when they sign up for a life insurance policy, compared to if they sign up for a life insurance policy when their half-birthday age is 56. (For more information, read our “How to Find an Old Life Insurance Policy“).

Some life insurance companies, including nationwide life insurance review, will offer what is called level premiums, which is where life insurance companies will calculate premium increases over the next few decades and put them into a fixed rate. This means that you’ll have a fixed life insurance rate that won’t increase, but the rate will initially be more expensive than non-fixed rates. 

You can also use life insurance policy backdating if your life insurance company uses half-birthdays to calculate rates. Backdating is when you can backdate your life insurance policy up to six months in the past to reduce your age. You will then pay premiums based on your earlier age. 

Read more: Backdating (Saving Age) Life Insurance: How It Can Save You Money

Other Factors That Determine Your Life Insurance Rates 

Age isn’t the only factor that determines your life insurance policy rates. Other life insurance factors besides age that companies use include the following: 

• Death benefit. Having a larger death benefit payout will increase your life insurance premiums. 
• Family history. A family history of hereditary diseases can increase your rates.
• Gender. Males have higher life insurance rates than females. Statistically, males die sooner than females. This means the company will get fewer payments before having to shell out a death benefit. 
• Health. Poor health will result in higher life insurance rates. 
• Policy type. What type of life insurance policy you purchase will affect how much you pay. 
• Use of tobacco. Life insurance for tobacco chewers and smokers generally carries higher rates, as tobacco use is linked to many serious health problems. 

So even though the use of a half-birthday age by your life insurance company can raise rates, many other factors besides age are still used to calculate your rates. 

The Final Word on Calculating Your Life Insurance Age 

If you are calculating your actual age, it is easy. It is simply the age you are now, based on your last birthday. If you are calculating your half-birthday age, your age is whatever birthday is closest. So if you are closer to the date of turning 65 than the date when you turned 64, your insurance age is 65. 

If you are worried about finding affordable life insurance rates, shopping around for coverage is the best way to find savings and life insurance for low-income individuals. To find the best life insurance rates from providers in your area, regardless of your age, use our free quote comparison tool.