The Top 10 Factors That Affect Life Insurance Premiums

89% of people who apply for life insurance are offered an insurance policy at standard rates, or better.
Only 2 to 3% of those who apply are are turned down. 

Life insurance premiums are based on a variety of different factors, and it can be a bit confusing to many people to make sense of why they are being charged a certain rate. These top 10 factors will take the confusion out of understanding how life insurance is rated.

1. Your Age.   This is an incredibly important factor. All other things being equal, the younger you are the lower your rate will be. This is simply because you are less likely to pass away when you are younger. 
2. Your Health History.    Your medical records will be an important deciding factor in your rate. If you have a history of any kind of chronic disease or other potential health problems it makes you a higher risk for the insurance company, resulting in higher rates.  If you applied for mortgage insurance or optional group insurance you may have been declined.   This does not mean you can't buy insurance.  Many people who have been turned down by mortgage insurers and group insurers often apply for individual coverage and are excepted.  Individual insurance is usually the only way to buy insurance if you have a health condition. 
Your Current Health.   You will generally have to go through a medical exam to look for things like high blood pressure or other health concerns that might be a sign of future problems. People who are currently in good health will see lower rates.  Even if your health condition is quite serious and you were turned down for coverage you may qualify for coverage down the road.   If you applied for insurance more than two years ago and were turned down you may now qualify for coverage if your condition has stabilized 
3. Your Weight.  If you are overweight or obese based on a height to weight ratio scale, you may pay more for health insurance. Being overweight is known to come with potential health problems that could result in earlier death. That means a higher risk for the insurance company.  Some people's build is such that their weight is not average.  Underweight people can also be turned down.
4. Your Occupation and participation in Dangerous Sports.   If you happen to be a race car driver, insurance companies have good reason to see your job as a bit risky. Certain dangerous occupations may result in an increase in rates or even denial of coverage because they carry such a heavy risk of accidental death.   If you participate in dangerous sports like hang glide, scuba dive, regularly fly in private aircraft,  rock climb, or do missionary work you are likely going to be required to fill out a questionnaire to determine the level of risk associated to your activities.  
5. Smoking.   Smokers pay more for life insurance simply because of the many risks to health and life inherent in the habit of smoking. If you quit smoking, you can qualify for lower rates within a year – just one of the good reasons to quit.
6. Drinking, Drug Use, Driving Habits and Criminal Activities.   Heavy alcohol consumption can also take a major toll on your health. That is why insurance companies ask about your drinking habits as well as smoking habits. Those who drink more are likely to pay more for their insurance rates.  Same applies to drug users.  Many drug users will not be considered unless they have abstained for two or more years.   People with numerous driving infractions or a have impaired driving charges may find they have to pay more or may be turned down.  Criminal convictions can also play a role.  
7. Your Family History.    Those with a major family history of serious illnesses such as heart disease and cancer, which can be hereditary, may find themselves paying more for life insurance because they do not qualify for preferred rates. Genetically speaking, they are more likely to be diagnosed with the same terminal illness and to die from it.
8. Your Gender.   Gender equality is a good thing, but your gender does say something about your life expectancy. Women live longer than men as a general rule, which means they will pay generally lower rates for life insurance.
9. The Policy Itself.   The longer the term of the policy and the larger the amount of the death benefit the more you will pay for it. Simply put, this is because the risk that you will die during the policy term is much higher when they are covering you for a longer time period. And the more they will have to pay out on your death, the more they will charge you for that coverage. Short term policies are less expensive than long terms, and whole, or permanent life insurance is generally the most expensive because they insure people until they die. 

How much impact each of these has on your rates depends on how the insurance company rates each factor and also on the combined effect of multiple factors. For example, the combination of being overweight with a family history of diabetes could affect your rate more than one or the other alone.  

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