Life Insurance Basics

8 Factors that Determine Your Life Insurance Premium



Life insurance is an essential investment for you and your family. Numerous factors determine how much you will pay for life insurance premiums. Let’s look at the major factors that determine life insurance premiums in Doylestown, PA.

1. Age

Age is most likely the number one factor in the cost of life insurance premiums. As you age, the cost of insurance will increase. This is because younger applicants are more healthy, less risky for insurance carriers. In addition, the likelihood that you will outlive a current policy or make payments on a new policy is when you are young. As a result, the premiums for life insurance are cheaper if you buy a policy when you are young. Also, as you continue through life, health conditions will arise, thus increasing the cost of a policy.

2. Medical History – Paramedical exam

Your medical history is the second most significant factor impacting the cost of life insurance. If your history shows that you have had a handful of medical complications, your premium will be lower. However, your rates will be higher if you have health issues or a chronic illness. Additionally, most insurance carriers may require a medical examination (with blood and urine samples) to review for health factors that could lead to future medical problems. The dollar value of the life insurance policy also determines if you will need to get a paramed exam, provide specimens, and/or provide an APS (Attending Physician Statement).

3. Family Health History

Due to certain medical conditions traveling through genetics, a look into your family’s health history will most likely be conducted by an insurer. For example, suppose your family has a history of heart disease or cancer. In that case, insurers will consider this a potential aspect of your future, thus raising your life insurance premium costs. 

4. Gender

Your gender can determine your life insurance premiums. For example, since women tend to live longer than men, women typically pay less for their life insurance. However, some states are removing gender biases in state policies.

5. Tobacco & Marijuana use

If you currently smoke, chew, vape tobacco or marijuana your premium will cost more due to the health risks that come with these activities. However, if you quit smoking, then you may be able to apply for a lower rate. Smoking includes the weekend cigar on the golf course. Most insurance companies will lower your rates only after a waiting period. Whether you say you use marijuana recreationally or for medical reasons probably won’t matter in terms of the resulting life insurance rates based on use. For medicinal marijuana users, a life insurance company will want to know about the underlying medical condition that led to the marijuana use. And that medical condition can also affect life insurance options.  Many people say the marijuana use is for pain management and that’s not enough of a response, that’s way too general. Insurance carriers want to know what causing the pain. Is it a mental issue (depression) or physical issue (cancer)? How often is the use?

6. Activities

If you regularly partake in high-risk hobbies, you may not be a good candidate for life insurance.

Motor vehicle racing and sky diving are examples of high-risk activities. Do you have plans to travel outside of the United States in the next year? Have you been convicted of a felony, or on probation? These activities may preclude you from qualifying for life insurance with some carriers. 

7. Occupation

If your job puts you at regular risk, your life insurance will cost more. For example, if you are either potentially in danger every day through your job or if your job might have long-term health effects (such as working in a mine or power plant), and may increase your life insurance premium.

8. Driving Record

Depending on your age and the face value of the insurance coverage insurance carriers will review your driving record and can affect your life insurance premium. If you are a risky driver with numerous tickets, prices for life insurance will be more expensive. If you are a safe driver, you will qualify for a lower life insurance premium.