5 Factors That Affect Life Insurance Rates


Cost of life insurance
As you embark on the life insurance application process, it helps to be aware of the factors that affect costs.

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Life insurance and the financial protection it provides is something that most financial advisors consider worthy.

Many adults should have basic life insurance and some should also have supplementary policy. But it should be noted that not all life insurance policies are equal – and some may cost more than others, depending on your personal circumstances.

If you don’t currently have a life insurance policy or just want to upgrade the coverage you already have, you can get started now by easily getting a quote. It’s a great first step in determining what you might have to pay.

As you embark on the application process, it helps to have a clear understanding of the factors that affect costs.

5 Factors That Influence Life Insurance Rates

If you are a working adult, spouse or parent, you will likely benefit from some type of life insurance policy. While millions of Americans would benefit from life insurance, that doesn’t necessarily mean they’ll have the same experience or pay the same price. This is because the cost of life insurance varies from person to person and depends on a wide range of factors such as:

  1. Age: This is obvious but should not be overlooked, even if you are older and in good health. A younger candidate is less likely to encounter health problems than an older candidate. Thus, younger policyholders are a less risky bet, even if both groups are healthy. Therefore, the younger you are, the less you will have to pay. As you age, the rate will increase.
  2. Health: If you are sick, have a current or pre-existing medical condition, you may pay more for life insurance than if you were in good shape without any problems. This is especially true for smokers because the health issues they are prone to are well known, making them difficult to insure at a reasonable cost.
  3. Genre: It may seem unfair for one sex to pay more but, statistically, women live longer than men. Since men often (but not always) die at an earlier age than women, they can expect to pay more for their life insurance coverage.
  4. Policy type: Not all policies are created equal. Some offers withdrawal options. Some don’t. Some insure you for a fixed term while others cover you for life. Different policies have different costs. Understand the difference between whole and term life insurance. The type you choose (and qualify for) will influence your rate.
  5. Family medical history: Your genetics play a role when getting life insurance. A history of cancer, heart disease or diabetes could be an indicator of your own health. If you have a family history with major health issues, this could be a determining factor in the price of your life insurance.

Not sure how these factors might affect the rates you qualify for? You can easily check rates from multiple sources right now to see what you would pay.

Other Life Insurance Rate Considerations

While the five factors above are some of the most important when trying to determine how much you will pay for life insurance, they are not the only considerations a company will take into account. Factors such as your occupation, driving record, and personal lifestyle may also come into play. Anything considered risky will likely lead to a higher rate.

Conversely, if these factors are insignificant, do not expect them to have a significant effect on the cost.

As mentioned above, life insurance is something many adults should have, but the costs they pay to have it vary widely. Know what to expect before applying. Speak to a life insurance professional today and get a free quote.

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