Major Factors That Determine Life Insurance Rates

You can't know how much you will pay for life insurance before you request for quotes. The factors that determine the premiums vary by person. Below are some of these factors.

Your current health is one of the best indicators of life expectancy. In fact, most insurance companies require you to undergo a medical exam before they can cover you. You may enjoy good rates if your medical exam gives you a clean bill of health. On the other hand, diseases such as diabetes, obesity, and high blood pressure can raise your rates.

Your current age determines how many years remain in your life expectancy. The younger you are, the more years you will pay your premiums. The longer you pay your premiums, the lower your rates will be.

The average life expectancy in the U.S. is 78.6 years (combined life expectancy). Thus, if you buy life insurance at 60 years, you only have 18.6 years on your life expectancy. If you buy the policy at 30 years, you have 48.6 years remaining on your life expectancy. Thus, younger people enjoy lower premiums than their older counterparts.

Gender plays a role since U.S. women, on average, live longer than men. The life expectancies are 81.1 and 76.1 for women and men, respectively. Thus, women pay slightly lower premiums than men.

Insurance companies have different categories of life insurance policies. The common types include:

• Term life insurance with a guaranteed death benefit if the insured dies within a specified period
• Whole life insurance that lasts your lifetime — the policy lasts as long as the insured lifetime
• Universal life insurance that allows you to change premiums and death benefits without getting a new policy

These policies have different features, which means they cost the insurance company different resources. As such, the policy you choose determines the premiums you pay. For example, whole life insurance costs more than term life insurance because it includes both a death benefit and guaranteed cash value.

If you opt for term life insurance, then the term or period of coverage also determines the premiums. Many people buy term life insurance for 10, 15, 20, or 30 years. If you buy a 30-year policy, you will pay your premiums longer than you would with a 20- or 10-year policy. Longer premium payments translate to lower rates.

Your lifestyle affects your risk of death. A risky lifestyle attracts higher premiums than a safe lifestyle. For example, you might pay higher rates if you smoke or love extreme sports, such as skydiving, bungee jumping, and motorsports. Some companies won't sell you a policy if you live a risky lifestyle. On the other hand, other companies specialize in such high-risk clients.

Your occupation also determines your rates since it determines your risk of dying. For example, firefighters, racetrack drivers, and miners face more dangers than other professionals, such as teachers. You may enjoy lower rates if you have a safe profession.

Some diseases are hereditary. As such, your family's medical history determines your risk of certain diseases. Examples include diabetes, heart diseases, mental illness, and stroke, among others.

A family medical history that predisposes you to dangerous diseases increases your insurance rates. On the other hand, inexpensive premiums await you if your family's medical history is clean.

As with other forms of insurance, life insurance rates also vary by carrier. Illinois Insurance Center offers affordable insurance services for multiple lines of insurance like, Homeowners, Auto, Disability and life. Contact us for a quote today, and we will be glad to help you get a good policy at a reasonable cost.