Do Life Insurance Companies Care About Your Half Birthday?

    Do Life Insurance Companies Care About Your Half Birthday? How It Affects Your Insurance Rates:

    Most people don’t pay much attention to their half birthdays – many don’t even know what it is. However, insurance companies put great importance on them. Because age is an important factor in your insurance rate calculations, your half birthday is a key consideration when determining your premiums.

    In this guide, we’ll discuss what exactly a half birthday is, how your half birthday can influence your insurance costs, and what you can do to lower your premiums if your half birthday has passed.

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    How Does Age Influence Insurance Premiums? 

    To determine your rates, insurance companies take into consideration various factors. These factors include your age, health, gender, smoking habits, and occupation. These factors represent your risk level or your likelihood of dying within your insurance term. The sooner you’re likely to die, the more insurers will charge you on premiums.

    Out of the aforementioned factors, age is one of the most important considerations in deciding your insurance premium. The older you get, the shorter your life expectancy. This increases your risk to the insurer which, in turn, increases your premiums. 

    On average, every year you age, your insurance premiums increase by 8 to 10 percent. For applicants 50 and up, this yearly increase will be even higher, reaching up to 12% per year.

    Older people also have a harder time qualifying for insurance in the first place and may have to undergo more rigorous medical testing. With this increased scrutiny, insurers will be more likely to discover health issues that may make insurance prohibitively expensive.

    How Insurers Calculate Age

    Knowing how insurers see your age is important if you’re looking to save on premiums. In this section, we’ll explain the categories that are used when insurers calculate your age.

    Actual Age

    Simply put, your actual age is your real age – the one that only changes on your birthday. If you were born on July 15th, 1980, then your actual age from July 15th, 2020 to July 14th, 2021 is 40 years old.

    Nearest Age

    Your nearest age is measured by your half birthday, which is six months from the date of your actual birthday. For example, if you were born in July of 1980, then your half birthday would be in January. Depending on the date, your nearest age would be:

    • From July 2020 to January 2021: 40
    • From January 2021 to July 2021: 41

    Insurance Age

    Your insurance age is the age insurance companies consider you to be, for premium calculation and other policy purposes. Most insurance providers classify you using your nearest age because it’s generally a more accurate measure of your physical health.

    Why Half Birthdays Matter

    Half birthdays matter because knowing when to apply for insurance can save you up to 10% on life insurance premiums. On your half birthday, you’re physically closer to being one year older than your current age. 

    For instance, if you’re 40 and six months old, your physical health is closer to that of a 41-year old than it is to a 40-year old. Life insurance companies consider your nearest age when calculating your premiums, so you’ll be charged the insurance rates of a 41-year old if you apply after your half birthday. While the difference in insurance rates may be minor if you’re young, you’ll see substantial yearly increases in premiums as you get older.

    Another important thing to consider is that your half birthday may influence your premiums even if you already have a life insurance application in progress. If your half birthday occurs as your application is being processed, you may be charged a higher insurance rate when the insurer finally gives you a policy offer.

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    How To Save On Premiums By Backdating 

    If your policy is approved after your half birthday, you may be charged higher premiums based on your nearest age. You can choose to either accept this higher insurance rate or opt to backdate your policy. Backdating your policy means that you’ll be charged based on your actual age, granting you lower insurance rates.

    Backdating activates your insurance policy at an earlier date. This is usually the month before your half birthday occurs. although you can technically backdate up to six months prior in most cases. This means that you can enjoy lower rates offered to applicants of your actual age. 

    However, backdating isn’t free. Because your policy is considered “already active”, you’ll have to pay premiums for the backdated months. For example, let’s say your half birthday occurred in July and your policy was approved in August. By backdating your insurance policy to June, you’ll have to pay both June and July’s premiums even if you weren’t insured at the time.

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    Caveats To Consider When Backdating 

    Backdating may sound like an appealing option to save up on premiums. However, there are some considerations to think about before accepting a backdate. 

    How Much You Save

    Backdating your insurance policy means that you have to pay additional premiums to cover your backdated months. You should calculate if the lower rates are worth the extra premium payments. 

    While younger applicants won’t see substantial savings from backdating, older applicants might. If you’re 25 years old, backdating a 20-year term policy may save you $29. Backdating the same policy at 45 would save you $2415. Generally, backdating becomes more viable as you grow older since your rates increase sharply every year.

    Policy Duration

    If you’re backdating on a term life insurance policy, you may be paying more to receive less insurance coverage. For example, if you backdate 5 months on a 20-year policy, this means you’ll only receive 19 years and 7 months’ worth of coverage instead of the full 20 years the policy originally provides. Before taking the offer to backdate, you should consider which would benefit you more – saving up on premiums or enjoying your full insurance coverage period.


    Even if you don’t put much importance on your half birthday, insurance companies do. Getting approved for insurance before your half birthday will help you enjoy lower premium rates. However, even if you apply for your insurance after your half birthday, you can still save money by backdating. 

    If you’re still wondering if backdating is the most cost-effective solution for you, Wesley Insurance, LLC is here to help. Our professional team can assist you with getting the best insurance rates even if your half birthday has passed. Contact us today for more information! 

    Written By Cameron McDowell
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