What Determines My Life Insurance Rates? Author:    Posted under: Life InsuranceLife Insurance questions answeredLife Insurance RatesLife Insurance Ratings and Factors

This is a question most people ask when considering purchasing a life insurance policy. Many wonder how companies arrive at their quotes, or even why quotes vary from one insurance provider to another.

As uncomfortable as it may be for some to answer rather personal questions, insurance companies need the information to get a better idea of where you stand in terms of risk. The importance of being truthful in your answers to their questions and in your application cannot be stressed enough. Misrepresenting yourself will only cause more problems than it is worth and when you get caught, it will be grounds enough for them to cancel your policy altogether.

Your Age

Simply put, younger individuals pay lower insurance premiums because the likelihood of their imminent mortality is significantly lower. The older you get, the higher your premiums are raised. You will find that rates increase considerably past the age of 60.

Your Health

Individuals are grouped into a health class based on the mortality risk you present. If you have a history of the following, you can be sure to be paying more for your life insurance premium:

  • high blood pressure
  • high cholesterol levels
  • cardiovascular disease
  • Diabetes
  • Cancer
  • substance abuse
  • tobacco use

Your mental health is something that factors in a quote. If you have ever been clinically depressed, or have a history of mental illness in the family, you can expect a raise in your insurance rates.

Your Lifestyle

Engaging in hazardous activities such as bungee jumping, scuba diving or sky-diving and the like will also be red flags for insurance companies. Your driving record is another suggestion as to how you live your life. Reckless driving will result in multiple moving violations and a history of car accidents. Even planning a trip to a country with an active travel warning will raise your premium, or even be cause for life insurance companies to decline your application. However, if you exercise regularly and make a point of eating a healthy diet, your insurance provider might be inclined to group you in a favorable health class.

Your Physical fitness, Weight and Height

Results from a physical exam will determine how fit you are. An optimum ratio between your weight and height will get you lower premium rates than those with weight problems. This is because an individual’s body proportions correlate with his life expectancy.

Your Sex

Studies show that women generally outlive men, so men usually pay more for life insurance than women do.

Your Job

A police officer, fireman, logger, electric power installer, and truck driver all have one thing in common: their occupations constantly put them at risk. And this would mean higher life insurance rates for them.

Your Credit Score

If you’ve been responsible with your finances, this is suggestive of a responsible lifestyle and therefore you will not be considered risky to insure.

Determinants to your life insurance rates may or may not be limited to these. But it is safe to say that this guideline is enough to give you a better grip of the things you can choose to change with regards to your lifestyle and habits that may affect your life insurance premiums.


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