5 factors that can affect your life insurance premiums

It’s never too early to think of the future, and more so than ever, when it comes to applying for life insurance. Having a policy in place can ensure that your loved ones and family are supported when you’re no longer around, and any financial expenses are sufficiently covered. And You can use a life insurance estimator to get the idea of cost.

But did you know that there are certain personal circumstances that can affect the rate you pay or the level of coverage you’re expected to get? Researching the insurance providers is certainly worthwhile to understand their policies’ criteria, but in the meantime, let us guide you through five of the main factors that can determine the rate of your life insurance policy. 

1. Age

The age at which you apply for life insurance is very important, as this is relevant to your life expectancy. Insurers will use your age to determine the premium you pay and how much coverage you are eligible for. 

In general, the older you are the more you are expected to pay, as there is an increased likelihood the insurer will have to pay out in the event of your death. On the other hand, applying for life insurance when you’re younger can be beneficial, as the premiums tend to be much cheaper. This is because you are less likely to have significant health problems, and have longer left in your life to continue to pay towards your cover. 

2. Gender

Typically, females have a longer life expectancy than males, and so this is sometimes reflected by the amount you pay. According to the National Center for Health Statistics, the average life expectancy in the US is 78.7 years old. When split by sex, the life expectancy for males is slightly lower at 76.3 years, and comes in higher for females, with a life expectancy of 81.2 years old.  

However, some US states are moving towards unisex legislation, so gender will not affect the rate or coverage of your insurance. Montana has already put these procedures in place, and is currently the only state where insurers must be gender-neutral and rates are not impacted by sex.  

3. Health

Health is another important element that insurers take into account when considering your life insurance policy. There are certain health conditions that have a higher risk in the eyes of the insurer, and are assessed in terms of the likelihood of causing fatality. 

Some insurers require a medical exam, which is carried out by a nurse or medical professional employed by the insurance company. You can find plenty of helpful online guides and resources about these types of medical exam to help you understand this further. According to theinsurancebulletin.com, it usually involves taking a urine sample, a blood test and checking your blood pressure. 

In other cases, the insurer will access and examine your medical history and past records. They will look at any health problems you’ve encountered, as well as treatments and medications. Sometimes this will also involve looking at your family medical conditions, to assess any possible hereditary conditions. 

Your life insurance policy is also dependent on the health risks within your life, such as smoking or excessive alcohol consumption. If you decide to give up smoking, informing your insurer can potentially reduce the amount you pay. 

4. Lifestyle

Certain aspects and the way you live your life can also affect your life insurance policy. If you enjoy the thrill of adrenaline-pumping activities, such as skydiving, extreme rock climbing or racing motor bikes, then this could lead to higher premiums. 

The criteria for these hobbies will vary between insurers, but if there’s an increased chance of being involved in an accident, then this will impact your coverage and eligibility for life insurance. 

5. Occupation

Just as there are several hobbies classed as high-risk, there are also some jobs that can affect your life insurance rates. Occupations such as construction workers, pilots, and any role that requires you to deal with toxic chemicals, fall under the category of high-risk. 

Being involved in hazardous duties can impact your overall health and safety, and so is a considerable factor that insurers take into account during the application process.