If you’re just starting to look for life insurance, you may be wondering just how much of your paycheck will be going toward this coverage. There are multiple factors that determine the rates that you’ll pay for your life insurance policy. Before you start your search, read on for the top 15 factors that contribute to your life insurance coverage and rates.
Though we like to think of age as just a number, it is the most important factor when it comes to life insurance. Since there is less risk of death, younger individuals receive lower rates. This is why we recommend to purchase your life insurance policy as young as possible.
As with age, being overweight also comes with more risk for serious health problems. Because of this, if you are overweight or obese, you may end up paying more for your coverage.
3. Current Health
Part of your life insurance application will generally require a medical exam to check for any health risks that could be a sign of future problems. The result of this exam will have an effect on your rate.
4. Health History
Along with your current health, a look at your medical records will determine if you have had any major health concerns in the past that could put you at a higher risk for serious issues in the future.
Statistics make gender a factor in life insurance coverage. Since women generally live longer than men, they also tend to have lower insurance rates.
What you do for a living can affect your life insurance rate as well. If your work requires you to perform dangerous duties that put you at a higher risk of accidental death, you will pay higher insurance rates. In turn, if you are exposed to toxic chemicals or your job is known to have other long-term health effects, you will likely pay more for your coverage.
7. Marital Status
Being married won’t have a direct impact on your life insurance rates, however, you may be able to save money if you and your spouse purchase a policy together.
Life insurance rates are all about your risk of death and therefore risk to the company that insures you. Smoking is known to have numerous health risks that can lead to cancer and other fatal diseases. If you are a smoker and decide to quit, you could qualify for much lower life insurance premiums.
Drinking alcohol is another risky habit when it comes to life insurance coverage. Your consumption of alcohol will factor into your life insurance rate – those that drink more will pay more.
10. Family Medical History
As we previously discussed, your medical history has an effect on your life insurance coverage. Your family’s medical history will also play a role in determining your rates. If you have relatives with serious health issues, especially those that are hereditary, your cost for coverage will be higher.
11. Lifestyle and Hobbies
Just as risky habits like drinking and smoking affect your life insurance coverage, dangerous activities, such as race car driving and skydiving, will also be a factor. If you participate in these high-risk hobbies, you will be paying more.
12. Driving Record
Your habits on the road affect more than just your auto insurance. If you have multiple driving violations, you are considered to be at a higher risk for accidents, and may find you’ll be paying higher rates for your life insurance coverage.
13. Foreign Travel
Depending on the destination, duration, and frequency, your travel can have an effect on your life insurance coverage. Certain countries are considered to be more dangerous and if you plan to spend a considerable amount of time in a high-risk area, you be paying more for your coverage. If you travel on a regular basis, you will also be paying more for the inherent risk involved with your means of transportation.
14. Purpose of Insurance
There are a few different reasons you might be purchasing a life insurance policy and each plays its own role in determining your rate. Whether you are purchasing a policy as part of your estate planning or for your family’s or business’s protection, your insurance rates will change accordingly.
15. The Policy
The type and length of your policy and the amount of your benefit all contribute to the rate you will pay for your life insurance coverage. Basically, the longer the term and the larger the amount, the more you will pay. In addition, whole or permanent life insurance policies are generally more expensive than term life insurance policies.
The degree to which each of these factors affect your life insurance rate will depend on the severity of each and the insurance provider you choose. Contact Millhiser Smith today to ensure you have the coverage you need at a rate you can afford.