Life insurance premiums are determined by a combination of factors that help carriers assess the risk of insuring each applicant. The primary factors include age, health status, gender, tobacco use, coverage amount, policy type, and term length. Understanding these factors helps you anticipate your costs and identify ways to potentially qualify for more competitive rates.
Age is the single most significant factor. Premiums increase with age because mortality risk rises over time. A policy purchased at 30 will cost substantially less than the same coverage at 50 or 60. Health status encompasses your overall physical condition, including chronic conditions, prescription medications, family medical history, BMI, blood pressure, and cholesterol levels. These factors determine your health classification (Preferred Plus, Preferred, Standard Plus, Standard, or substandard table ratings), which directly affects your premium.
Gender affects premiums because women have longer average life expectancies than men, resulting in lower premiums for the same coverage. Tobacco use significantly increases premiums — smokers and tobacco users may pay two to three times more than non-smokers. Most carriers require you to be tobacco-free for 12 months to qualify for non-smoker rates, though some require longer periods. The definition of tobacco use varies by carrier and may include cigarettes, cigars, chewing tobacco, nicotine patches, and vaping.
Additional factors include occupation and hobbies (dangerous occupations or activities like skydiving or rock climbing may increase premiums), driving record (DUIs can affect rates), criminal history, and the specific coverage amount and policy features selected. Riders and optional benefits may add to the premium. All premiums are subject to the issuing carrier's underwriting evaluation.