The
price of life insurance is based on a number of factors, but the most important
are age, health and the type of policy. In general, life insurance is cheaper
the younger and healthier you are.
The average life insurance cost is
a tricky thing to pin down because it depends on several different factors. The
most important ones that go into the price of life insurance include:
Age: One
of the most important factors in calculating rates. As you age, the probability
that the insurer will have to pay out goes up, leading to higher quotes.
Gender: Females have a longer life expectancy, so typically
will pay less than males of the same age and health.
Height and weight: If your height and weight are within the certain
limits, you’ll receive better rates than if you’re deemed overweight or
underweight, both of which could cause health problems.
Past and current health: How healthy you are
significantly affecting your rates. Pre-existing conditions are considered to
determine if they will decrease your life expectancy.
Family health history (siblings and parents): If your family medical history
shows serious illnesses, especially hereditary diseases, you could be saddled
with higher quotes.
Nicotine and/or marijuana use: Smokers, other nicotine users
(including vaping and the patch) and marijuana users have a higher risk of
developing cancer and respiratory diseases, so they’ll be quoted higher rates.
History of substance abuse: Abusing drugs or alcohol can
lower your life expectancy, resulting in higher life insurance rates.
Driving record (particularly DUIs and speeding
tickets): Driving
under the influence, driving at high rates of speed and/or causing accidents
makes you a higher risk and results in increased rates.
Credit: Credit is a factor in some risk scores that life
insurers use.
The type of
policy you buy: Term life insurance costs less than permanent
life insurance for two reasons: it doesn’t have a savings plan component and it
only covers you for a set amount of time rather than your whole life. It’s wise to buy
life insurance when you’re younger, before rates increase and your policy
options decline. With every year that passes your life insurance quotes will go
up, even if you’re in excellent health. By waiting to buy life insurance
you also run the risk that you’ll develop a health condition that will cause an
even higher rate when you buy a policy.
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