8 Factors That Can Affect Life Insurance Premiums

Life insurance is one of the best ways you can protect your loved ones. However, understanding which factors can affect your life insurance premium and what aspects of your application could raise or lower your rates can be confusing.

According to a survey by Life Happens, less than half of Americans consider themselves to be knowledgeable about life insurance. This is especially true when it comes to costs, with the median estimate of the cost of life insurance clocking in at more than three times the actual cost.

We’re here to demystify the process so you can have a better handle on how life insurance rates are determined when comparing life insurance policies.

8 Factors That Affect Life Insurance Premiums

1. Age 

Your date of birth is the top factor affecting your life insurance premium. There are a number of reasons why age factors into life insurance and younger policyholders pay lower premiums. As you age, the likelihood an insurer will have to pay out on your policy increases; therefore premiums increase.

2. Gender

Women tend to live longer than men. In the United States, the average life expectancy for women is 81.1 and 76.1 for men. The disparity means that women generally pay less for life insurance than men do.

3. Health History

Insurers may require a medical exam and access to your health records before issuing a policy. A history of medical conditions, especially serious illnesses such as heart disease or cancer, will increase your premiums. Insurers will also look at your weight, cholesterol levels, blood pressure and other metrics that could indicate future medical conditions.

4. Family Health History

Even if you have no current medical conditions, a family history of illness, especially hereditary diseases, could factor into your life insurance premium and increase the cost of your coverage.

5. Smoking

The health risks associated with smoking, including potentially fatal diseases like cancer, mean increased premiums. If you’ve quit smoking since purchasing life insurance (congrats, by the way!), call your provider to see if your nonsmoker status will lower your rate.

6. Hobbies

Do you spend weekends skydiving? Have a passion for racing cars? High-risk hobbies could lead to higher premiums, but exactly which activities fall into this category varies by insurer. It may pay to shop around for quotes if you enjoy high-risk hobbies.

7. Occupation

Loggers, pilots and roofers are among the many professions considered riskier than others. When you apply for life insurance, insurers will ask about your work. Your premiums could be higher if your occupation exposes you to toxic chemicals or requires you to perform dangerous duties. 

8. The Policy

The specifics of the policy you choose is another factor that affects your life insurance premium. Policies issued for larger benefit amounts over longer terms generally cost more than policies with smaller benefit amounts over shorter periods. Also, there are differences between whole and term life insurance policies. Whole, or permanent, life insurance policies tend to be more expensive than term life insurance policies.

Understanding the factors that affect life insurance premiums — and making changes such as losing weight, quitting smoking or adopting a healthy lifestyle to lower your blood pressure and cholesterol — can help you get the right policy at the right price. 

We Can Help

Our life insurance calculator helps you determine how much coverage you need. We offer three types of life insurance: term life, whole life and universal life. Talk with your Farm Bureau agent to see which is right for you.