9 Factors that influence your life insurance rates

By: Nelson Smith on June 20, 2016

Because life insurance is a pretty generic product (the only thing really separating companies is their perceived ability to pay a claim), most consumers are really only interested in one factor, which is price.

Shopping around between insurers can be a great way for someone to get a lower price, but it’s not the only way to see what’s available. Here are some other factors that affect how much you’ll pay for insurance.

1. Age

There’s no way around it. All things considered, an older person is more at risk than a younger person. Sometimes it even makes sense to get life insurance as a single person to avoid problems with life insurance rates. Thus, older people pay more for life insurance.

2. Gender

We live in a world where gender increasingly doesn’t matter, and that’s a good thing. But in the world of life insurance, women will still pay slightly less than men because actuarial tables show they live, on average, about seven years longer.

3. Weight

With extra pounds comes a greater risk for things like heart disease, diabetes, and other life-shortening ailments. While weight isn’t the perfect measure of health, life insurers have determined it’s important enough that heavier people pay more.

4. Smoking

Like with weight, there’s no guarantee a smoker is less healthy than their non-smoking counterparts. But it’s usually a pretty good indicator, so insurers make smokers pay a big premium.

Where the smoking argument gets interesting is marijuana. Many pro-pot advocates point out that smoking marijuana isn’t nearly as bad for you as smoking cigarettes, yet life insurers treat the two as equal on applications.

5. Drinking

Insurers generally group smokers into one group. As long as you’ve smoked something in the past year, you’re considered a smoker.

Drinking is a little more complicated. Insurers punish people who drink a lot much more than they punish someone who only enjoys a glass of wine or two a week. But even occasional drinkers pay a little more than someone who completely stays away from the stuff.

6. Pre-existing conditions

As you compare life insurance quotes, you probably notice questions about an applicant’s health history. This is where you disclose any ailments you have, minor to major. These can even include things like going to the doctor for chest pains, dizziness, or shortness of breath one time.  

Admitting to these things will increase the price of your monthly insurance premium. But if you don’t disclose, and it’s time get a payout, the insurer will look through your medical history to see if a policyholder lied on the application. If it can be proven they did, the insurer could deny the claim request.

7. Family history

If something like heart disease or cancer has a history of causing premature death in a family, a life insurer will take that into consideration. As with any of these risk factors, this will cause a premium to go up.

8. Occupation

Certain jobs are more dangerous than others. Some have the potential to kill someone slowly – like a desk job – while others are more prone to fatal accidents. If you’re a truck driver, construction worker, lumberjack, or have another similarly dangerous profession, be prepared to pay more.

9. The payout

The potential payout is perhaps the biggest thing that affects how much you pay for life insurance. The difference between $100,000 and $1,000,000 is a lot more than just one zero. If you want your loved ones to really feel secure if you pass prematurely, be prepared to pay a big premium for this coverage.