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I am reading AAA Term Life Insurance offer. I am wondering that the rate will stay inside the same group until the end of the insurance (80 years old) or will jump to a different group when you are older and older? For example, if I am in the 55-59 group right now, a few years later, I will use the rate for 60-64, 65-69,...?

They didn't mention the premium. That means no money back at the end?

EDIT:

It says: Coverage ends at age 80. Coverage type is called: Direct Term Life Insurance

  • Where did you get the information from, why don't you ask the person who gave it to you? – quid Jan 14 at 7:05
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I am reading AAA Term Life Insurance offer. I am wondering that the rate will stay inside the same group until the end of the insurance (80 years old) or will jump to a different group when you are older and older?

Term life insurance has options, besides the amount of insurance. The most important is the length of the term. It isn't unusual to see terms of 5, 10, or 20 years.

Another important option is does the policy have a level premium? If it does, then the amount you pay each year doesn't change during the term of the policy. That does mean that you overpay in the early years to underpay in the later years. If you keep it the entire term to works out in the end, but if you drop the policy early you spent more than you need to. Don't get me wrong, a term that meets your needs is a good thing.

Some policies will require you to take a physical exam, but that depends on the size of the policy and their rules.

For example, if I am in the 55-59 group right now, a few years later, I will use the rate for 60-64, 65-69,...?

Ignoring health for a moment. The initial rate will depend on the size of the policy, the length of the term, and which age group you are in. The length of the term determines which group you will be in at the end. They will use the starting and ending groups to determine how to craft the level premium.

Of course when the term ends if you still need/want insurance you will be in another age group, so it might be much more expensive to get another policy. In addition your health might not be as good, which can move you to a more expensive category.

Saying I will just get the longest term they offer can seem to make sense, but it can be costly. You will overpay in the first half of the term. Many people buying a policy when they have their first kid, discover that by the time they have their last child they might need a different amount, so locking in a policy for decades might not be the best.

They didn't mention the premium. That means no money back at the end?

Those are two different things. The premium is what you pay each month/year.

Some policies do have a cash value, and can give it to you at the end of the term.

If the cash value at the end is what is important to you, then you may be looking for a non-term policy. Those policies are a mix of insurance and investing. They generally are the worst of both, and are completely different than term policy.

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I am wondering that the rate will stay inside the same group until the end of the insurance (80 years old)

Yes. For a term life insurance you lock in the premium at the start date and it stays fixed either until it expires or you die.

That means no money back at the end?

"Term Life Insurance" means no money back at the end. Money back insurances are called "Whole Life Insurance". See more details at https://www.policygenius.com/life-insurance/types-of-life-insurance/

They didn't mention the premium

Prepare for sticker shock. A term life of maybe $500,000 until age 80 will run you many thousand dollars a year. A whole life will be even more expensive than that. A lot more.

Let's take a step back and look at a few high level issues

  1. Life insurances are big money for the insurance company and they are marketing them aggressively. Be very careful and prepared before you give them your e-mail of phone number. They WILL try to push you into buying something you really don't need.
  2. If you don't have people who depend financially on you, you don't need life insurance at all.
  3. Whole life is almost always a bad choice. It combines term life insurance and investment but obscures the details of each so they insurance company can fleece you better. Typically the investment returns for Whole Life are terrible. You are much better offer to separate the two: Get a Term Life for your death risk and do investing separately optimizing for your specific needs and situation.
  4. Life insurance in most cases covers the risk of "no more income" when you die. That's only a risk while you are an active earner. Once you retire or down-size, you don't need life insurance any more and should drop it.

My recommendation would be to get term life insurance for an amount that the people who depend on you can still get by without you and only for the term that you are planning on actively earning or the need isn't there any more.

Examples: once the kids our out of college, you can assume that they will be financially independent. Once the house is paid off, you don't need to cover for a mortgage payoff anymore.

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