*What Are the Main Factors That Affect Life Insurance Rates? is a sponsored post.
When you get your first life insurance quote, you’ll likely have a few questions about how contributing factors determine your monthly premium.
Many individuals living in the U.S. do not have life insurance. For a majority of these individuals, it seems that the cost of life insurance is too high to manage along with other expenses. However, for many people, life insurance is actually a lot cheaper than they may have thought. So, before you go searching for the best life insurance quotes, you should do some research to estimate how much you’ll be paying for a life insurance policy based on your age, gender, health, lifestyle, and occupation. Today, we’re going to find out about the different variables that will affect your monthly premium.
1. Your Age
The sooner you secure a life insurance quote, the more options you’ll have and the less you’ll have to pay per month.
Your age is arguably the most important factor insurance companies consider.
Many people in their 20s and 30s who have considered life insurance often say that they haven’t purchased a policy because it is too expensive. In reality, your 20s and 30s are the best time to secure a life insurance quote. In general, the longer you wait to purchase a life insurance policy, the more you will end up paying. Very often rates for younger people can be as low as $25-$30 per month for a term life insurance policy.
2. Your Gender
Due to a life expectancy gap in men and women, women will often be offered lower cost life insurance quotes.
In the U.S., the life expectancy for women is longer than it is for men — about 5 years longer. Insurance companies notice this, and since the death benefits payout for men is likely to happen sooner, men will end up paying higher monthly rates for life insurance. There is one U.S. state, Montana, that only offers gender neutral life insurance, meaning that both genders will pay the same in Montana.
3. Your Health Status and History
Health status is one of the most important determining factors for life insurance quotes.
Health insurance is far cheaper when you are in good health.
When an insurance provider is determining life insurance quotes, health status is the most important factor considered. For those who are not healthy or suffer from chronic illness, the cost of term life insurance will be higher because of the likelihood of a death benefit payout before the term has expired.
For most life insurance providers, you will have to undergo a physical and forward your medical records to their office. When they receive the results of your physical and medical records they will consider:
- Your medical history, including past surgeries and treatments
- Your height and weight, often including your BMI
- Any behaviors that are deemed high risk like drinking, smoking, or drug use
- Your family’s medical history, focusing on any hereditary conditions
There is also an option to get life insurance without an exam. However as a general rule, your life insurance quote will be more expensive the less your insurance provider knows about you. Examples of this are instant life insurance, simplified issue life insurance, and guaranteed issue life insurance. All of these options tend to be more expensive than term life insurance, but can be preferable depending on your lifestyle and life insurance need.
4. Your Lifestyle
For most life insurance quotes, you will have to fill out a few questions about your lifestyle that will affect the overall cost.
A dangerous job will increase your monthly life insurance rate.
In addition to pulling your medical information, insurance providers often ask about certain aspects of your lifestyle before you get your life insurance quote. A few of the questions you should expect when getting your life insurance policy are:
- Your driving record – Insurance companies will be looking for any kind of reckless driving, history of DUI, other violations
- Your criminal record – If you have been convicted of a felony there will be a 10 year waiting period and after a DUI there is a 5 year waiting period before you can qualify for a life insurance policy.
- Any potentially dangerous activities – If you have a dangerous job or dangerous hobbies, for example mining or skydiving, it will affect your insurance policy.
- Other financial factors – History of bankruptcy can cause your coverage to decline
Once your medical history and lifestyle are examined by the insurance company, they will present you with your life insurance quote.
There are, of course, ways that you can change your lifestyle to secure a lower rate. For example, if you quit smoking or left a dangerous job, you can contact your insurance provider to undergo a secondary physical and get a new quote. It is important to remember that the lowest cost insurance quotes are generally given to younger people. So, the best time to secure a low cost monthly premium is as soon as possible.
Disclosure: This is a sponsored post. I sincerely hope this post helped you sort out some facts about life insurance.
