What is 'Attained Age'

Attained age is the age at which the beneficiary of an insurance policy, retirement plan or other aged-dependent plan, is able to receive benefits or withdraw funds. Attained age can be any age at which benefits are received. In some cases, the person may have to take action when he reaches the attained age, such as retiring from a company. Attained age can also be an individual policyholder's age at a specific point in time. Attained age can be used to calculate pricing in policies that set payments according to the policy holder's age. Typically, the pricing increases as the policy holder ages.

BREAKING DOWN 'Attained Age'

Attained age pricing adjusts pricing according to age. The older the policy holder, the more that policy holder pays to remain covered. This type of policy may have lower initial expenses, but may become more expensive than issue-age pricing or community-rated pricing as the policy holder ages.

An attained-age policy is a policy in which premiums are based on your age at enrollment. The prices will be lower when you first enroll, but prices may increase as you get older. Attained-age rating is among the most common pricing methods in the United States. 

Attained Age and Medigap Insurance

All Medigap policies have rate increases to keep up with inflation. For the most part, they are generally conservative increases since any increase must first be approved by the state insurance department. Also, because attained-age rated policies are so common, they represent the biggest group of insured policyholders. This helps to minimize and spread the insurance risk out over many people, thereby keeping pricing on these policies competitive.

Attained age is one of three ways insurance companies use to price their Medigap plans. The others are issue-age ratings and community ratings. These other two methods of pricing are less common. Community-rated policies consider other factors, such as which zip code where the insured lives or whether they use tobacco.

Issue-age rated policies are somewhat less common. In theory, when you buy an issue-age rated policy, the carrier will always price you at the age at which you bought the policy. While this may seem attractive, these policies (depending on your state) often have much higher starting premiums. However, no matter how they're initially priced, such policies are still subject to annual rate increases to keep up with inflation.

If you are considering an issue-age policy, give us a call. We can check how your state typically rate its policies. We’ll also tell you whether these are a good buy where you live, or if you should pursue another alternative that’s a better bet for long-term rate stability.

RELATED TERMS
  1. Yearly Renewable Term (YRT)

    A yearly renewable term is a one-year term life insurance policy. ...
  2. Insurance Inflation Protection

    Insurance inflation protection is designed to allow policyholders ...
  3. Yearly Renewable Group Term Insurance ...

    A type of insurance policy purchased by employers to cover several ...
  4. Waiver Of Restoration Premium

    A clause in an insurance policy that says that the insurance ...
  5. Free Look Period

    A free look period is a period of time in which a new life insurance ...
  6. Valuation Mortality Table

    A statistical chart that is used by insurance companies to calculate ...
Related Articles
  1. Managing Wealth

    Find the Best Medigap Plan for You

    Picking a plan to fill in the “gaps” in Original Medicare from the alphabet soup of options can be daunting. Here are guidelines that can help.
  2. Retirement

    The Impact Of Your Starting Age On Social Security

    Retiring at 62 sounds nice, but it could affect the amount of social security you receive.
  3. Insurance

    A Cost-Benefit Analysis of Long-Term Care Insurance

    Is it a good idea to have a long-term care policy? Here is some data to help you decide.
  4. Insurance

    What Is the Best Age to Get Life Insurance?

    Learn about the optimal time for purchasing personal life insurance and why delaying the buying decision may have costly consequences.
  5. Retirement

    Near or over 65? Use these retirement planning tips

    Find out how to save smarter after 65.
  6. Insurance

    Is Loan Protection Insurance Right For You?

    Loan protection insurance can keep you from defaulting on your loans when you're in financial trouble, but it's not for everyone. Learn more on how it can help you.
  7. Personal Finance

    The Best Life Insurance for Military Families

    Two of the most common types of life insurance are term and whole life. Here's why the latter isn't a good idea for most military families.
  8. Retirement

    Top 6 Myths About Social Security Benefits

    Misinformation on retirement benefits is common. We'll set the record straight.
  9. Retirement

    How Having a Job Affects Social Security Benefits

    Social Security benefits are important for retirees' finances, but a part-time job can complicate matters if certain benchmarks aren't reached.
Hot Definitions
  1. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  2. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
  3. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing a company that measures its current share price relative ...
  4. Internal Rate of Return - IRR

    Internal Rate of Return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.
  5. Limit Order

    An order placed with a brokerage to buy or sell a set number of shares at a specified price or better.
  6. Current Ratio

    The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations.
Trading Center