How Age Affects Your Short Term Insurance Premiums

From the day you are born to the day you die age will always play a very important role in your life. The paradox of life – when we are young we can’t wait to get older, and when we are old…we wonder why we did not enjoy our youth more. Before we get too philosophical, let’s just confirm that age plays an important role in the amount you will pay for short-term insurance.

The circle of life

As you go through life your needs are constantly changing. When you buy your first car it feels like the best day of your life; you will need insurance for that car. In the mean time you rent a flat and you start accumulating furniture, you have a state of the art cell phone; you need insurance for your furniture and your phone. Then, a couple of years later you can finally afford to buy a house…you need insurance for that.

Throughout your working life your insurance needs will constantly change, you may go into your own business, buy a bigger house, buy a car for your wife; you need insurance. Eventually, you go on retirement, you scale down from the four bedroom house to an apartment in a security retirement village; you still need insurance – but your needs have changed yet again.

The young and short-term insurance

When you buy your first car you know you need to get it insured but now you find out that you must pay more for insurance because you are young; as a matter of fact some insurance companies will not even give you car insurance until you are twenty-five! When they do agree to insure your car you will have to pay a higher premium and higher excess amounts should you make a claim.

I can hear the chorus of “That’s so unfair!” ringing. Yes, it could be seen as unfair in some ways. Try to look at it from the insurance company’s viewpoint: Younger drivers are active, they like speed, they are inexperienced drivers, they take risks…The fact is that statistics have proved to insurance companies that young drivers are high risk and the higher the risk, the higher the insurance premiums.

What can young people do to get cheaper insurance?

Forget about that modified car or sports car, you will pay a lot more for insurance – after all – they are built for speed. Rather buy a lower performance car; it will cost you less in insurance. Fit anti-theft devices to your car, the best you can afford, just make sure that the system you install is approved by your insurance company.

If you have a degree you can qualify for a reduction in insurance. If you are married as well (the insurance companies think you will stop partying!) Also, combine your household insurance with your car insurance, you will receive a discount. Find out from your insurance company (or surf the net) at what age you will qualify for a reduction and remind them of it when the time comes.

Over twenty-five

Like we said, make sure that your premiums are adjusted, you are now seen by the insurance industry as officially grown-up!

All through your life, make it a rule to review your insurance needs regularly. You are going to go through many changes and stages and each one of them will require an adjustment to your insurance portfolio.

Over fifty

People over fifty will find that they can obtain insurance at a discount. The cut-off used to be fifty-five, now it’s fifty in most cases. It’s actually very interesting as more and more people are working late into their sixties and even seventies. (but let’s not tell the insurance people.)

The fact is, most insurance companies will give you a discount once you are over fifty. People of that age drive less and drive more slowly, they are experienced drivers and therefore a lesser risk to the insurance company. (Yes I know some old people should no longer drive, but that’s another topic.)

Over fifties also spend more time at home and therefore household insurance will also be cheaper when someone is at home all day. So you see, old age has its benefits, and of course, fifty is no-where near old! Once you retire you may move into a smaller place, sell a lot of your furniture, so an adjustment will be necessary in your householder contents insurance.

Going through changes in your life

The golden rule of insurance is that you must remember to advise your insurance company of any change in your lifestyle. Don’t assume they must know that you are now twenty-five or retired, advise them and insist on an adjustment in your insurance premiums.

Enjoy your age, whatever it is, life is great!