Factors That Affect Life Insurance Premiums

Life insurance premiums are fixed based on a number of factors. Some of these are quite obvious, like your age, health status or driving records. Other factors like your job or the hobbies you pursue may come to you as a surprise, but nonetheless, they’re things taken into consideration when an insurer gives you a quote.

Factors That Affect Life Insurance Premiums

Seven things that can have an effect on life insurance premiums

Here are seven factors that can impact life insurance costs.

1.      Age

The younger you are, the lower your premiums will be. A young person is seen as less of a risk and will be charged a low premium. Your premiums will go on increasing as you age if you have purchased an annually renewable term life policy.

2.      Gender

Men pay higher premiums than women. Insurance companies use life expectancy statistics to calculate rates and men miss out on lower rates due to the longevity gap, says this article by the Examiner.

3.      Smoking

On an average, smokers may have to pay three or four times more than their non-smoking counterparts. Forbes reports that a 40 year old male smoker will have a pay an annual premium of around $1,535 for a 20-year $500,000 policy compared to $350 for a 40 year old man who doesn’t use tobacco. Quit the habit and after a year, you can get a discount.

4.      Health and family history

Your health matters and so does that of your immediate family. You may not be able to get low rates if you are suffering from cancer, cardiovascular disease, diabetes, cholesterol or depression or have a family history of any of these illnesses, says Forbes. How much you weigh can also affect how much you pay.

5.      Driving record

Errant drivers pay a lot more on their life insurance policy. Minor offences like a couple of parking tickets won’t pose a problem but a history of accidents or other major traffic violations will.

6.      Profession

Individuals employed in high-risk jobs like that of a pilot attract a higher premium than those working in an office, says an article on U.S. News. Some insurers do not levy a high premium on high-risk customers like police officers or fire personnel by taking into regard their ‘public servant’ status.

7.      Hobbies

What you enjoy doing in your spare time can directly affect the life insurance rates you pay. If you love ‘dangerous’ activities like skydiving or B.A.S.E. jumping, insurers will view you as a customer with a high risk and charge a higher premium, although this differs from insurer to insurer.

If you think your life insurance rates will be affected by any of these factors, there are ways you can save money. Reduce life insurance premiums by shopping around on the internet for the best deal possible. There are many insurance experts who can guide you to find a company that can accommodate your needs and give you a free quote that matches perfectly with your financial requirements and lifestyle.

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