But life insurance costs can be a bit tricky to figure out.
Rates are influenced by numerous factors, including your age, gender and even your driving record.
What Factors Influence Life Insurance Rates?
Doeslife insurance for seniorsmake financial sense? Here’s how much you can expect to pay for coverage if you’re ages 65 or older.
Insurance companies are in a risky business literally.
As you compare life insurance rates, consider these influencing factors:
1.
Age
Your age is perhaps the most influential factor in determining your life insurance premiums.
As you age, the likelihood of health issues and death increase, leading to higher premiums.
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Gender
Gender is another factor insurers look at when determining premiums.
Health
Your overall health plays a major role in life insurance rates.
Most insurers will require you to undergo medical underwriting prior to issuing you a policy.
This usually involves a medical exam and/or completing a medical questionnaire.
You may even need to undergo an EKG to check your heart.
More online companies are offering no exam policies, but expect lower coverage amounts and higher costs.
Using tobacco can increase your life insurance premiums by 30% or more.
And were not just talking about smoking cigarettes either.
However, each insurance company is different.
And when it comes to marijuana use?
Family Medical History
Does breast cancer run in the family?
What about heart disease?
Insurers usually look at the health conditions and longevity of your immediate family members to assess your risk.
Insurers perceive these factors as indications of potential health risks or increased chances of an untimely death.
You might get rejected for life insurance if youre awaiting trial, in jail or on parole.
Your system may also get denied if you have major or multiple criminal convictions.
Driving Record
Your driving record can impact your life insurance premiums.
It makes sense: Reckless driving habits suggest a higher likelihood of premature death due to car accidents.
Thats a risky investment for a life insurance company.
Life insurance companies have access to lots of information, including your driving records.
Insurers tend to focus on the last three to five years of your record.
Maintaining a clean driving record and practicing safe driving habits can help you secure more favorable life insurance rates.
Jobs such as law enforcement, mining and logging are considered high risk to insurance companies.
Likewise, hobbies such as skydiving, scuba diving and race car driving will also push your rates higher.
Some insurers may also look at yourcredit scorewhen setting rates.
Building a solid credit history and maintaining a good credit score can positively influence your life insurance rates.
Policy length is also a key factor.
As mentioned earlier, term life policies are cheaper than permanent policies because they only last a limited time.
Consider how long you really need coverage.
When will your mortgage be paid off?
How long until your kids move out?
Naturally, the higher the coverage amount, the higher your premiums will be.
Rachel Christian is a Certified Educator in Personal Finance and a senior writer at The Penny Hoarder.
She focuses on retirement, life insurance, taxes and investing.
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