What Factors Influence Life Insurance Costs?

Getting life insurance can be a time-consuming process that requires both care and consideration. With numerous policies on the market, you’ll want to make sure you choose one that works best for you in terms of coverage and price. However, your life insurer will need to assess how much risk you pose to them before offering a price quote on your plan.

Several parts of your life influence that risk, a primary part being your risk of dying. For that reason, your insurer will have many questions about your lifestyle at the start of the enrollment process.

A few of the factors they will take into account include the following:

• Age
• Health history/pre-existing conditions
• Weight
• Current health
• Hobbies
• Occupation
• Tobacco and substance use history
• Gender
• Location of residence
• Credit score

On top of that, the type of plan you are interested in also influences your eligibility for coverage and how much you will pay. For example, a term life policy lasts for only a certain number of years while a whole life plan lasts indefinitely. In other words, a whole life plan will last until your death, no matter when that may be.

It’s generally recommended to buy life insurance early, usually before the age of 30, to get the most affordable plan. The younger you are at the start of your coverage, the lower your risk of death—regardless of any pre-existing conditions. As a result, it’s more likely your insurer will approve a policy of your choice at a more affordable rate.