Life insurance can help take the financial burden off your family after you are gone. Aside from this, it is also like an investment. Over a few years, you may get a lower premium on your savings. While comparing the life insurance you get, you may want to consider factors that affect life insurance premiums.
Most life insurance companies consider a few factors when determining life insurance rates and premiums. These factors can most times affect your insurance premiums positively or negatively. Some factors that affect life insurance include age, income, gender, and others. These factors can also help you reduce your life insurance premium.
Understanding the factors that affect life insurance helps you understand insurance quotes and premiums better. Improving some of the factors that affect life insurance gives you a better chance of getting lower insurance premiums.
10 Factors That Affect Life Insurance Premiums
Different factors are considered when life insurance premiums are determined. These factors include age, health condition, gender, smoking, occupation and hobbies, criminal record, driving record, and so on. This section of my write-up contains insights into 10 factors that affect life insurance premiums.
Age
Life insurance companies look into your age and life expectancy when evaluating premiums. The younger you are, the lower your monthly life insurance quotes, while older customers get higher life insurance quotes. Older life insurance policyholders may be limited in the level term length period.
Term life insurance can be bought by customers in their 80s, but a shorter term period will be given. However, customers who are interested in cash-value life insurance policies may get one in some companies whose maximum age is 85 or younger.
Gender
There’s an anticipation for females to live roughly six years longer than males. Because of this, women pay less on life insurance premiums than men.
Health
Your health plays a major role in determining life insurance premiums. Individuals with certain health conditions are viewed as higher-risk to insure. This is because they are determined to likely have a life insurance payout much sooner. Your health details are obtained by life insurers through life insurance medical exams.
They get your medical records and process drug prescriptions to see what medications you have taken. This, however, is done with your permission. Some health conditions may affect your life insurance premiums. Some of these conditions include diabetes, any disease, high blood pressure, hypertension, sleep apnea, and depression or anxiety.
Smoking
Cigarettes are not the only things that affect your life insurance rates. Any form of nicotine you use can get you into smoker rates. You may be added to the smoker rates if you take nicotine patches and gum, chewing tobacco, pipes, smokeless tobacco, e-cigarettes, and vaping. The rules about life insurance rates based on the repetitiveness of nicotine a customer uses vary by life insurance company.
Family Medical History
Many life insurance applications will ask for your family’s medical history, as it can influence your premiums. If your family’s health history includes conditions such as cancer, congenital heart disease, melanoma, or cardiovascular disease, you may face higher premiums and rates.
Occupation and Hobbies
Life insurance applications will ask some questions relating to your lifestyle. These questions include dangerous hobbies and occupations. If your job and hobbies are dangerous, life insurance companies may consider you a risk, causing you to pay more on premiums and rates.
Driving Record
If you have a driving history with DUIs. Suspended licenses and reckless driving convictions: you will be considered high-risk. This can get you higher premiums and interest rates.
Criminal Record
Having a criminal record can affect your life insurance premiums along with your chances of qualifying for life insurance. Generally, there is a 10-year waiting period after getting out of jail and a five-year waiting period after a DUI to qualify for a life insurance policy. Chances are that you will be rejected for life insurance if you are awaiting trial, on probation, in jail, or on parole.
Recent Financial Issues
Life insurance regulates bankruptcies when reviewing life insurance applications. Applicants who have some financial issues like bankruptcy on their record within the past two to five years may not be eligible for a life insurance policy. However, this depends on the insurance company you are working with. Some life insurance companies may consider your application if you recently went bankrupt.
Coverage Length and Amount
The type of policy you intend to purchase and the amount of coverage you need are other factors that may affect your life insurance. Term life insurance is the most affordable option, while universal life insurance tends to be more costly. Whole life insurance is the priciest of the three.
