11 Factors that Influence Life Insurance Premiums

11 Factors that Influence Life Insurance Premiums

Could You Lower Your Costs?

Life insurance is a sensible way of looking out for an unknown future. The basic idea is very simple: if the worst happens and a policyholder is no longer around to take care of loved ones, a death benefit will be paid out to ease their burden.

Perhaps more than any other form of insurance, the cost of a life insurance policy can vary widely from individual to individual, with many different factors being taken into account.

Policy Type and Coverage

The choice of policy and the amount of coverage sets the base level from which premiums are calculated. The longer the term and the larger the death benefit, the higher the premiums will be. To keep premiums down, the enrollee should only take out as much coverage as is realistically needed, and consider whether they’ll need lifelong insurance or only until their children have grown, the mortgage is paid off, and so on.

Current Health

Before an insurance policy is issued, enrollees often need to undergo a medical examination, or at the least give permission for their doctor to report on their current state of health. If there are medical issues such as high blood pressure, then the quoted premium will be higher. If a more serious condition such as heart disease is at play, the application could be rejected altogether. It’s important to note that mental health is also included in this assessment. A diagnosis of depression or anxiety can also push up the cost.

Medical History

It’s not only the enrollee’s current state of health that’s of concern to an insurer – recent medical history is also taken into account. Problems such as broken bones or other injuries will be ignored, but any conditions that may possibly recur will be included in the calculations, even if the individual is no longer suffering from them. Again, this includes mental health issues, even if they’re now resolved.

Family Medical History

Insurers will also want to know about any medical issues that run in the family. If parents, grandparents, or siblings have health problems with a hereditary cause, then the enrollee will be assumed to be also at risk of suffering from these conditions in the future, and premiums will be raised accordingly.


This is one of the few health-related factors that the enrollee has a degree of control over. Smoking, drinking, and not looking after weight will all have an impact on general health. Insurance forms will ask for details of these and many other aspects of the enrollee’s lifestyle. Some questions may seem intrusive and personal, but it’s important not to gloss over them for privacy reasons, or in the hope of lowering a quote. If the enrollee is found to have intentionally provided incorrect information, then a policy could be invalidated and any claims refused.


Enrollees may also be asked whether they take part in any hobbies which could be considered dangerous. Obviously, activities such as skydiving, mountain climbing, or skiing should be declared, but any regularly-engaged pastime which could conceivably result in injury or worse should be mentioned on the form.


Occupation is also a factor into premium calculations. Clearly, working as a firefighter or a police officer involves a higher level of risk than most. However, some other jobs may not have such an obvious influence. For example, sedentary occupations with high stress levels will also tend to increase the price quoted.

Travel Habits

Frequent foreign travel can also have an impact on life insurance premiums, even if separate travel insurance is taken out. Policies may become invalid for the periods when overseas, or for claims with causes which can be traced back to travel. Frequent globetrotters will sometimes see higher quotes than those who mostly remain at home.

Driving History

Not many people realize that driving history can also have an effect on life insurance premiums. If DMV records show a series of violations, this will push up the price. However, transgressions in the distant past will tend to be overlooked if the applicant has a clean record over the last three to five years.


On average women tend to live longer, engage in less risky behaviors, and have healthier lifestyles than men. This all presents lower risk to the insurer, and therefore lower premiums will sometimes be offered to women. This may seem unfair or even discriminatory, but insurance is largely about calculating premiums based on average risks, and the data shows that for the most part men die younger.


Lastly, age is an extremely important factor that determines policy premiums, all else being equal. Older people are statistically more likely to die than younger people, and so insurance premiums will only get more expensive as age increases. The younger an applicant is when they take out a policy the better, as some of the cost advantages of youth will be locked into the policy for future years.

Quoted life insurance premiums are a result of a complex calculation taking all of the above into account. However, each insurer gives each of these factors different importance, and quotes can differ significantly between different companies. However, an even better alternative is to speak to a qualified insurance agent or customer service rep, who can use their knowledge and offer guideance towards a policy likely to offer the best overall deal for the circumstances.

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