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Insurance Age Different from Actual Age?

I recently received an email from a client asking about his age. He was confused. He had been looking at the illustration I had left with him and thought that I had made a mistake! Mistakes do happen, but not on this illustration. He was wondering why this illustration said that he was 66, when he didn’t turn 66 until 4 months from now. Had we inputted the wrong birthday? Not at all.

The answer lies in the fact that life insurance companies do not calculate age in the same way that normal people do. Insurance age is actually nearest age, not actual age. In other words, if you are within 6 months of your birthday, you are counted as a year older, even though you are not. So, in my client’s case, even though he was 65, because he was less than 6 months from his birthday, the insurance quote I gave him counted him as 66 years of age.

Practically speaking this means that when applying for life insurance, you need to keep this in mind! Insurance premiums are partly based upon age. Therefore, if you are able to apply for coverage and be approved for coverage before you “turn” another year older, that is good to do. Being another year older can add quite a bit to the cost of your premium. Talk to your life insurance advisor about this today!