Factors Affecting Life Insurance Premiums
There are many factors that determine how much you pay in life insurance premium.
Some people tend to believe that life insurance uses only a couple of things but that could not be farther from the truth. In this article, we will delve into these factors.
- Gender
Gender is one of the key rating factors that life insurance companies use to determine your premium. In general, life insurance is cheaper for women than men. This is because women tend to live longer than men.
However, there are a few reasons why life insurance may be more expensive for men than women. One reason is that men are more likely to die from risky behaviors like smoking and drinking. Another reason is that men are more likely to work in dangerous occupations.
- Age
The younger you are, the lower your life insurance rates will be. This is for several reasons: first, younger people have a lower mortality rate than older people. Second, younger people are generally in better health than older people. And third, younger people have more time to build up their financial resources than older people. So if you’re looking to save money on your life insurance premium, it pays to start young.
- Health
One of the key factors that affect your life insurance premium is your health. The healthier you are, the less your life insurance premium is likely to be. This is because the insurance company sees you as a lower risk if you are healthy. Obesity is largely a factor in determining how healthy you are to the life insurance company. If you are obese, you will most likely pay a higher premium than someone who is not obese.
- Family Medical History
Believe it or not, you will pay in currency, what your ancestors experienced regarding their health. Family medical history is one of the main factors that insurance companies use to determine premiums. So, even if you don’t have any health challenges yourself, your premium could be high if there is a history of health challenges in your family. As unfair as this might look, it’s just the nature of the beast. During application, this is one of the questions you are asked which how you answer will be factored into your final life insurance premium.
- Lifestyle
If you are a person who likes to live on the edge and take risks, you will likely pay more in life insurance premiums than someone who lives a more sedate lifestyle. This is because the more risk you take, the greater the chance that something will happen to you and your family will need to make a claim on your policy. So if you enjoy activities like jumping out of a perfectly flying airplane, you can expect your life insurance premiums to reflect that!
Of course, it’s not just extreme sports that can affect your life insurance premium. Anything that increases the chance of you dying prematurely will likely result in a high premium.
- Tobacco Consumption
Usually, smoking or chewing tobacco is a habit that many say they picked up during teenage years. By the time most people are thinking about getting life insurance, this habit has become a stronghold that is hard to break. To life insurance companies, smoking is a huge risk that increases the chances of a prospect to get lung cancer. There are more health issues that could arise for someone who smokes and this is why life insurance companies usually increase the premium to match the risks they are taking to insure a smoker.
- Driving Record
This can somehow alarm some prospects seeking life insurance. A person with a history of drunk driving or any driving under influence of any illegal drug could dramatically increase the premium that one pays. Also, someone who has a lot of moving violations such as speeding tickets will most likely pay a higher premium than someone who does not.
If you fall in any of the factors above, there are still opportunities for you to obtain life insurance, however it might be a little expensive. To see what you can qualify for and what is affordable for you, schedule an appointment with an AfriKare Life executive today.