Critical Factors that Affect Your Life Insurance Quote

life insurance quote

According to Statista, approximately 54% of Americans have some form of a life insurance policy. It means that approximately 177 million Americans have been in the market comparing life insurance quotes.

Typically, when you purchase a life insurance policy, you have to answer a series of questions. Your responses play a critical role in determining how much risk you pose to the insurance company, which in turn determines your premium rate.

If you are considered a high-risk individual, the company will most likely give you a higher life insurance quote.

However, if the insurance company thinks you will probably live a long and healthy life, you will be considered low risk, and your quote may be much lower. Every insurer has its own criteria for issuing or declining to issue a policy.

So, what factors do underwriters take into account while determining your life insurance quote?  Read on to find out.

1. Age

Age is one of the most critical factors that life insurance companies consider when determining your life insurance quote. It not only dictates the cost of your policy but also determines how much coverage you can purchase.

In most cases, younger people get the best rates because they present a relatively lower risk to the insurer. Although you can’t control your age, you can control when you buy your life insurance policy.

For instance, a 35-year old adult can purchase a 20-year, $500,000 policy for as little as $30/month. However, if the same person waits until he turns 40 years old; the coverage cost will shoot up.

It means that being proactive can save you a lot of money when it comes to buying a life insurance policy. As you grow older, the more likely you will develop medical complications that would make it harder to get good coverage at an affordable rate.

Therefore it is important to purchase your life insurance coverage as early as possible.

2. Health

Health is another essential factor that determines your rates. Most life insurance companies require you to undergo a medical examination before they agree to insure you. Being slightly overweight or being a smoker may increase your quote.

Smoking can cause lung cancer and other health complications putting one’s life at risk. According to the Centers for Disease Control, tobacco harms almost every body organ and can easily lead to premature death.

life insurance quote

A 30-year-old woman who is in excellent health and doesn’t smoke could buy a 20-year, $500,000 policy for approximately $40/month or less. However, if she was a smoker, the monthly premium could easily shoot up to $130/month.

Other health-related factors usually considered include high blood pressure, diabetes, high cholesterol and family medical history. Eating a balanced diet, exercising, and regular doctor checkups can help you in this area.

3. Gender

Other than age, your gender also matters because women, on average, live longer than men. According to CDC, the average life expectancy of American women is 81.2 years, while that of American men is 76.4 years.

It means that women are more likely to pay their premiums for longer compared to men. Therefore, women will receive slightly lower quotes compared to men as long as health and other factors remain constant.

Some insurance companies use sophisticated statistical models to approximate how long someone with a specific profile is likely to live before they come up with their life insurance quote.

4. Family Medical History

You can do nothing about your gene composition, but life insurance companies are interested in knowing your family’s medical history.

A family with a medical history of cancer, stroke, diabetes and other serious medical conditions may expose you to these ailments, making you a high-risk individual.

Insurance providers are usually interested in any medical conditions your parents or siblings may have experienced, especially if they resulted in premature death. Some providers put more emphasis on your family medical history than others, but it is likely going to have some impact on your quote.

5. Occupation

Life insurance providers also check on the kind of job you do and your overall workplace environment. If your job or the environment around it exposes you to dangerous health risks, requires frequent traveling, or is considered a high-stress job, be prepared for a higher life insurance quote.

Jobs that are considered “safer” attract relatively low-cost life insurance rates because you are considered a low-risk individual.

6. Driving/Criminal Records

Life insurance providers must consider accidental death when making their final decision. One way they can easily determine your risk is by scrutinizing your driving records.

For instance, if your driving record shows multiple at-fault collisions or significant speeding infractions, it could mean that you are a reckless driver. Reckless driving will automatically increase your rate.

However, if it has been three years since you were last involved in a road accident, your driving record won’t have an impact on your premium rate.

Furthermore, a criminal record may impact your eligibility for life insurance coverage for several reasons. Most insurance companies believe that a criminal record could indicate a tendency towards riskier behavior, and incarceration can lead to poor health, resulting in premature death.

7. Hobbies

Lastly, what you do during your free time could also impact your life insurance quote. If you engage in risky activities, the insurance provider may give you higher quotes or decline to insure you altogether.

Some of the hobbies that are usually considered risky include rock climbing, scuba diving, skiing, car racing, bungee jumping or any other extreme sport.

Final Thought

Your life insurance quote will depend on several factors, some of which may be beyond your control. However, understanding these factors and taking time to research different policies can save you a lot of money in the long run.

At Insurance Master, we believe in providing you with the best insurance coverage that suits your unique needs and within your budget. Our licensed insurance agents are always ready to listen to your needs and help you find the right policy.

Talk to us today and let us help you find an affordable life insurance policy that will take care of you and your loved ones.

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