10 Factors that Affect Your Life Insurance Premiums

Your life insurance premiums are determined by a complex process of underwriting which evaluates many factors about your life and how you live it. Complex formulae and statistics reporting are all involved in determining even one quote and in order to process and interpret all pertinent information to your case, a specialist, known as an underwriter, is used. It is the job of an underwriter to try to balance profitability against risk when choosing whether or not to write a policy or how much to charge for it if they do. If they ask for too much, the insurance policy is likely to be refused. If they ask for too little, their company could suffer significant losses, costing the company greatly over time.

While most of the factors that surround your insurance underwriting and premium set are beyond your control, some are not. Here are 10 of the most common factors related to life insurance premiums:

  1. Your Age: An obvious factor, and one of the benefits of choosing whole life over term. The younger you are, the less likely you are to die, the less risk you represent to the insurance company the lower your premiums.
  2. Your Parentage: The diseases and malaise of your parents and grandparents and siblings will probably be a factor for the simple reason that some diseases are hereditary, or show a common, genetic trend such as in diabetes, high blood pressure or some forms of cancer.
  3. Your Weight: If you are significantly overweight or obese, your insurance premiums will reflect those additional pounds because of the statistical probability of other health conditions due to weight that may shorten your lifespan.
  4. Your Height: Too short? Not a problem, Too tall? Statistics show that you may not live as long as a person of more average height.
  5. Your Gender: Women live longer than men for a variety of reasons, some of which are still unknown. Generally speaking the average life expectancy for an American female is 3 years longer than her spouse, and that gap has been closing in recent decades.
  6. Your City/State/Zip: Some cities are, in fact, healthier to live in than others. This can be due to a whole host of reasons such as the pollution or crime levels.
  7. Your Smoking Preference: Smoking is a habit that is proven to be detrimental to the health and lifespan of a person engaging in it, and while not all people who smoke live shorter lives, most do if they do not quit. Insurance companies tend to write policies of smokers with a very heavy hand and some will not write them at all.
  8. Your Marital Status: Married people live longer than single pople do.
  9. Your Education Level: If you have a college or other advanced education, statistics show that you are likely to live longer.
  10. Your Race: It is very easy to see a statistical difference in life expectancy among the various races. Though this is yet another factor that you have no control over, it is something that most insurance companies will keep in mind when determining your premium levels, though the effect is not likely to be very significant.