Your life insurance cost depends on several factors, which all have to do with you being a unique individual. That’s why you must customize your own life insurance policy to fit your family’s needs. Let’s discuss all the factors here.
9 Factors That Affect Life Insurance Premiums
Each of these factors associates with risk and can increase your insurance premium:
-
Age
Younger people pay lower monthly life insurance premiums than older adults. The more you pay into a life insurance policy, the more benefits it will provide to your loved ones after your death. Seniors in their 80s have a hard time finding a life insurance company that offers them a policy.
-
Gender
Since females have a longer life expectancy than males, insurers often give lower rates to women. According to 2020 CDC data, female life expectancy is 80.5 years compared with 75.1 years for males. At the same time, life insurance companies usually don’t make gender a barrier to application acceptance.
-
Health
Certain life insurance policies involve taking a medical exam so that the insurer can learn your current state of health. They also may want you to provide thorough documentation of your medical history. The insurer needs to know if you have a disability or life-threatening condition.
-
Family medical history
Since many medical issues are hereditary, your life insurance cost will be directly affected by your family’s medical history. This information can help the insurance provider know what to expect in the future. If diabetes, for example, runs in the family, it raises the risk level for the insurer, which often equates to a higher premium.
-
Lifestyle
The lifestyle choices you make impact your life insurance cost as well. People who engage in dangerous sports and other high-risk activities can expect to pay a higher life insurance premium. People who heavily drink or smoke also will likely pay a higher cost than if they were non-drinkers or non-smokers.
-
Occupation
Career choice is a major factor because it can affect your stress level and physical health. A person who does strenuous work for many years can end up with physical injuries from it. Worker burnout can make stress more severe.
-
Policy type
The two main types of life insurance policies are permanent life and term life. Permanent life insurance lasts your entire lifetime and provides a wider array of benefits to both you and your survivors. So it costs more than term life insurance, which only lasts for a specific term, such as 30 years.
-
Coverage amount
Another factor that affects your life insurance premium is the amount of coverage you buy. Standard policies usually have set coverage limits, while customized policies can extend coverage.
-
Your credit
A good credit score helps keep your insurance costs on the lower side because it shows you are responsible for paying bills on time. A low FICO credit score can trigger higher insurance costs. Your credit history will affect your premium no matter which insurance provider you choose.
Customize Your Life Insurance with CAV Insurance Agency
If you want to reduce the cost of your life insurance policy without compromising on the required coverages, contact us today. At CAV Insurance Agency, our experienced team is ready to help you determine the coverage you need at the best rates.