Multiple factors determine the cost of life insurance premiums. Health, gender, age, and lifestyle comprise key categories to consider when shopping for the right life insurance policy at an affordable cost. Consider the following important issues.
Age, gender, and physical health all directly impact the cost of a life insurance premium. Younger policy holders pay lower premiums. As your age increases, so does the cost of the life insurance premium. As we age, the likelihood of our death increases, meaning that the possibility of the insurance company paying out a death claim is higher. The risk to the insurance company increases, so they cover the risk with a higher premium.
The same is true for the health of the policy holder. The healthier you are the lower will your premium be. Generally speaking, health is not verified for most policy holders beyond weight, height, and basic risk factors. If you have a pertinent health issue, it is important for you to disclose it before taking out the policy.
Women tend to be healthier than men and their life expectancy is longer. This leads to lower premiums for women in most cases.
It is difficult to determine how much smoking increases life insurance premiums. Studies differ on the amount of premium increase, but they do agree that smokers pay higher premiums than do non-smokers, perhaps as much as three times higher. If you smoke, you will definitely pay a significantly higher premium than non-smokers.
Travel to foreign countries will not necessarily increase your premium. However, if you travel for a living, or if you travel to high risk areas, your premium will most likely be higher. Some policies maintain exclusions for travel to war-torn areas.
High risk hobbies such as rock climbing, flying planes, or cliff diving will increase your premiums if you disclose the information ahead of time. It is usually best to be honest and find a policy that fits your lifestyle and your budget.
Fortunately, life insurance is easy to shop for. Do your homework and be upfront in your interactions with agents and you’ll be able to find a cost effective life insurance policy to meet your needs.