Top Factors That Affect Life Insurance Premiums

Life insurance is an important part of everyone’s financial plan.  In the event of your death, life insurance will help your loved ones financially.  Life insurance proceeds will pay for your funeral, your debts, your children’s education and will significantly reduce your family’s financial burden.

You will make life insurance premium payments every month for years.  So it is important that you understand the factors that determine your premium.  Some factors such as gender and family medical history are outside your control.  But there are also many factors you do control.

The premium you pay for your life insurance depends on the following factors.


Age is the single most deciding factor in how high your premiums will be.  As you get older, the risk increases that the life insurer will have to pay out a claim.  The younger you are, the lower your premiums.


In the US, women live, on average five years longer than men.  So premiums for women are lower.

Health History

Most insurers will require you to take a medical exam before they underwrite the policy.   The medical tests will likely include taking height and weight measurements, cholesterol and blood pressure readings, and sometimes EKG.

If you have medical conditions such as high blood pressure, it is important that you get them under control before you apply for a life insurance policy to ensure lower premiums.

Some insurers offer “No Exam” policies, but the premiums of those policies are always higher than those that require a medical exam.

Coverage Amount

Your coverage amount, also known as the death benefit is the amount your beneficiaries will get in the event of your death.  It is a big factor in how much you pay.  You will pay more for a $1,000,000 policy than a $250,000 policy.

Term of the policy

Shorter policies are cheaper than longer policies.  This is because the insurer faces a higher possibility of payout in case of longer duration policies.

Your Job

Your job also affects your life insurance premiums.  If you work in an environment that exposes your chemicals or you work with moving machinery, you are likely to pay higher premiums.


Needless to say, smoking is not good for you.  Smoking leads to a lot of health ailments.  If you smoke, you will pay more life insurance.  Try to kick the smoking habit before you get life insurance.  Many employers offer programs to help employees quit smoking.  So make use of them if your workplace offers such a program.

Family History

Even if you are in good health, if your family has a history of stroke or cancer, you are likely to pay higher premiums.  Unfortunately, you don’t get to choose your family medical history but know that it affects your premiums.


Many people are surprised to find out that hobbies affect how much they pay for life insurance.  If your hobbies include high-risk activities such as sky diving or high-speed racing, you will be paying more.

Other Criteria

Insurers also check your body mass index.  If your body mass index does not fit in the range set by the insurer, your rates will be higher.

Before an insurance company underwrites a policy,  it will run a prescription check to get a list of medications you are taking to understand your risk profile.

Bottom Line

Life insurance provides financial security for your loved ones in the event of your death.  The premium for the life insurance policy is dependent on a number of factors such as age, gender,  your health, family history, your job, and the term of the policy.  Understanding what goes into the insurance rates will help you save money when it’s time to buy life insurance.

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