I receive a lot of questions from clients about Life Insurance, so I thought it might be worth highlighting the variables that go into calculating your Life Insurance premiums. For those that have previously obtained a quote for a life insurance policy or used an online calculator, you are likely already well aware of the different factors that affect the premium. But are you aware of the most important ones? Below are the most crucial factors that come into play in determining YOUR cost of life insurance…
As we age, our risk of death increases and as such, life insurance premiums increase. It is best to consider buying life insurance early in your adult life, even if you don’t have major financial responsibilities or dependents yet. Preparing for your future at an early age could help save you money down the line.
Next to age, gender is another major factor in pricing. Insurance carriers use statistical models to approximate how long someone with a specific profile is likely to live. Women, on average, live nearly five years longer than men. And because they’re usually paying premiums for a longer period of time than males, they enjoy slightly lower rates. Sorry, Gentlemen!
Are You Healthy?
During your application process and in your medical exam, your health, including your blood pressure, height, weight, cholesterol levels and more, are analyzed. If any one of the factors is considered outside of normal range, your risk level could increase which could cause you to be approved with a higher premium, or worse case, denied life insurance.
Are You a Smoker?
It shouldn’t come as a shock that the use of tobacco products can increase your premiums significantly. Smoking puts you at a higher risk for all sorts of health ailments. So if you like to light up, it’s a red flag for insurance companies. In fact, it’s not uncommon for smokers to pay more than twice as much as non-smokers for comparable coverage. The effect on your pocketbook is another great reason to try and kick the habit.
Family Medical History
There’s not much you can do about your gene pool. However, a family history of stroke, cancer or other serious medical conditions may predispose you to these ailments and lead to higher rates. Carriers are usually interested in any conditions your parents or siblings have experienced, particularly if they contributed to a premature death. Some carriers put more emphasis on your family’s health than others, but it’s likely to have some impact on your premium.
If you’re in the habit of jumping out of planes, scuba diving or swimming with sharks, then there is a good chance you’ll be considered a high risk for life insurance. Regardless of your current health, insurers see these types of activities as dangerous and thus more difficult to insure.
Does Life Insurance make a bit more sense now? RogersGray has a variety of plans available to suit your needs and each is carefully thought through to ensure all aspects of your particular situation have been addressed. We also work with business owners for Key Person and Buy/Sell agreements.
For more information about life insurance or to start a quote, click the link below!
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Vice President | PRIVATE RISK
Mike Redfield is Vice President – Private Risk Advisor with RogersGray. From his previous professional experience he has worked with clients to provide insurance solutions for those planning for, and in retirement.
Insurance is confusing to many, Mike specializes in making it as painless as possible while putting together plans for his clients and presenting in an understandable way. Mike grew up in Yarmouth and now resides in Plymouth with his wife, children and their dog Mokie. You can connect with Mike on LinkedIn or by email.