If you are thinking about purchasing life insurance, it’s always beneficial to know how things will affect the price. Oh yes–certain things about your lifestyle and choices will change the life insurance premiums on your plan. Obviously, there are some factors you can’t do much about, like age and gender–but you may be able to improve other choices down the line. Also, proactive planning determines what plan you will be offered by the insurance agency. All in All, understanding each factor will help you make the right decisions for you and your financial future.
Five Important Factors
Age– Most insurance companies take a look at your current and possible life expectancy before they sell you a plan. To put it simply, the younger you are the less likely you are to pass away so you get lower monthly life insurance premiums. The opposite goes for when you get older. That’s why it is always a good idea to buy early, you get a cheaper rate and the early security.
Gender– Some may wonder what gender has to do with life insurance, and it might not be what you think. According to the CDC, life expectancy for women is roughly six years longer than men. That means women generally pay less for insurance plans than men.
Health– Unfortunately, health problems make you fall into high-risk categories. The issues may look like diabetes, high blood pressure, obesity, chronic illnesses and any other early-stage condition such as cancer. Show that your illness is being treated and that will help your application status. Insurance companies will also look at health factors such as your personal medical history, height and weight, and your family medical history.
- Smoking/Tobacco– Due to its rapid health decline, people who smoke usually pay at least twice as much for a life insurance policy. Smoking includes the use of e-cigarettes, vape pens, traditional cigarettes, cigars, pipes, and chewing tobacco. If you want to qualify as a non-smoker, most firms require you to be nicotine-free for at least a year. Unfortunately, companies usually count nicotine patches or gum under smoking, but it may get you a slightly reduced rate.
Occupation & Hobbies– Occupations include hazardous duties that could cause you to pay a higher rate. Jobs that put your life on the line or have you working in treacherous territories are a good example of this. If you’re someone who enjoys living on the edge, life insurance companies usually define dangerous hobbies as any activity that increases your likelihood of injury or death. Your policy might not be denied outright–which is also a possibility—due to risky hobbies, but it may cause you to pay more for coverage.
- A few common hobbies considered ‘dangerous’ by insurance are: flying, hang gliding, rock climbing, bungee jumping, skydiving, drag racing, and scuba diving.
If you are interested in knowing more about dangerous hobbies or occupations that could raise your premium–we have another blog that goes into further detail here.
Financial State– Your finances dictate both the plans you are offered and the plans you choose. Insurance companies will consider bankruptcies, and often decline coverage if you have filed bankruptcy in the last few years (2-5). If you have had a recent bankruptcy find an experienced life insurance agent who will help you find the right path. Additionally, credit and risk scores are a big factor in life insurance rates. Being on-top of all your financial payments is always important!
Different Types of Life Insurance
Term Life Insurance is very conventional and is the most popular type of coverage. It lasts for a specific set of years (usually 10-30). If you pass while the policy is still in effect, your beneficiaries will receive an insurance payout. If you are looking for a more affordable option, term life insurance is a simple plan that will provide you financially safe net income.
Permanent Life Insurance is available your entire life. It provides a death benefit to your beneficiaries as long as your premiums are paid for. If you view life insurance as more of an investment tool, then this is a good option for you. It allows you to have guaranteed coverage while considering other options. If you have dependents who require lifelong care, or your personal profile might disqualify you from getting approved for traditional life insurance, you might want to consider this type of life insurance.
Guaranteed Universal Life lets you skip both the medical and health exams. Like the name, it’s guaranteed for anyone who applies, but there is a waiting period before the full benefits are given. It is similar to a term life insurance policy, but it lasts until the age you choose. Premiums always stay the same and the death benefit never decreases. This policy provides a no-lapse guarantee as long as premiums are paid as outlined with policy loans, which may affect this if used. The cash value is built in small amounts, but is only used to supplement premiums in later years.
We also have a free Life Insurance Calculator! It’s easy to use. If you have any questions, we also offer free quotes from our trusted advisors. Life insurance premiums are important so let us help you today!
Need to Help with Life Insurance Premiums? Call Us Today!
At Arlington Greene, we can help you decide what works best, feel free to ask your insurance agent for more information and policies. We prefer to review all the options possible, and never pressure you into one policy over the other. If you have any questions about purchasing life insurance policies, please reach out and we will be happy to help!
Coming to a decision about life insurance can be so much to consider. With so many different policies it can be hard to determine what you need, all on your own. At Arlington Greene, we have experts in the life insurance field who are ready to help. Arlington offers all the same policies that you would find going directly through a specific insurance company. We can also help you find the right coverage at the best rates by comparing all side-by-side. Our team can help you decide on whatever plan is best for your situation. We can curate a plan just for you—guiding your family into securing your financial future!