Why might older applicants face higher insurance costs in Variable Life policies?

Older applicants typically face higher insurance costs in Variable Life policies because they are viewed as higher risk due to their age. As individuals age, the likelihood of health issues and mortality increases, which insurers take into account when calculating premiums. This greater perceived risk leads to higher costs for coverage.

Insurance companies often assess the potential longevity of applicants when determining rates, and older individuals generally have a shorter life expectancy compared to younger applicants. Therefore, the financial implications for the insurer are more pronounced, prompting them to charge higher premiums for older policyholders to ensure that the risk of payouts aligns with the policy's cost structure.

Age-related factors, such as health status and financial stability, can further contribute to this assessment, reinforcing the understanding that older applicants represent a larger risk pool for life insurers, necessitating higher costs to balance that risk.