10 Factors that will Affect your Life Insurance Premium

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As your career thrives, you could feel like you are on cloud 9. However, if you have financial dependents – such as kids – and you die unexpectedly early, they could suffer financially unless you had taken out a life insurance policy. Here is a list of factors that could affect your life insurance premium.

Age

Investopedia calls this “the number one factor behind life insurance premiums” – as, the younger you are, the longer period of time you are likely to make regular payments to the insurer before they would be required to make a payout to you, if ever.

Gender

This is the second-biggest factor in calculating life insurance premiums – as, on average, women live five years longer than men, according to HowStuffWorks. Hence, women tend to pay premiums over a lengthier period of time than men – and so present less of a risk to life insurers.

Smoking

This should hardly come as a surprise, as it is well-known that smoking adversely affects health. The same can be said of regularly using tobacco in any way, not just through smoking – which is why life insurance firms frown on this, too. 

Overall health  

The most financially appealing life insurance policies will require you to undertake a medical exam where various key metrics – including your blood pressure and cholesterol levels – are recorded. 

Of course, if any employees you have accept a group life insurance policy you offer, the health of these employees would be inspected.

BMI

As explained on the Forbes website, your BMI (body mass index) would usually be calculated from your height and weight. Overall, BMI is a measure of body fat. 

Family medical history 

Unfortunately, if you parents and siblings have histories of heart disease and cancer, you could be predisposed to these conditions as well. However, you need to be honest about your family’s medical history, or else your policy could end up void just when a payout would otherwise have been made.

Occupation

Certain jobs are inherently riskier than others. Examples of occupations that could hike your life insurance quote include airline pilot, rubbish collector and truck driver.

Driving record 

Perhaps surprisingly, many life insurance companies will heed your driving record – if, obviously, you have one – at the underwriting stage. However, your last three to five years as a driver are those that will come under the strongest scrutiny and have the largest effect on your premium.

Hobbies

If you like to live life on the edge, you can expect to be hit with larger life insurance premiums. Hobbies that many life insurers are likely to class as risky include scuba diving, rock climbing, motorcycle riding and hunting.

Financial factors 

Typically, life insurance companies will treat bankruptcies as a factor – and you could even be denied coverage if you have gone bankrupt at any point in the last five years. There are also insurers who use some risk scores that take credit into account – a strong incentive for you to make sure your financial situation is as healthy as practically possible.

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