Major Factors That Can Affect Your Life Insurance Premiums

Having life insurance is a good way to provide for your family after your passing. However, some circumstances will affect how much you need to pay for your premiums. You must make yourself aware of these factors.

Age and Health History

When your policy is being made, insurers will evaluate you to determine your level of risk. If you have higher risks, then it means the insurer will likely have to pay out your policy. Because of increased risk, your life insurance premiums will be higher. Age is a major factor here and is typically the first thing looked at. The older you are the higher your insurance premium will be. Similarly, if you have any conditions that take a toll on your health then you are also at a higher risk and will have a higher premium. Keep in mind that your family’s health history may also play a role here.

Your Occupation

Another major factor your insurer will look at is your occupation. There are some jobs out there that put your life at risk. There are many ways you could be put at risk. You could be working with heavy machinery. Some jobs will lead to sustained exposure to chemicals. Any job that requires extensive personal protective equipment will probably increase your risk to insurance companies. If your job has a high level of risk, then you’re likely to have a higher life insurance premium.

The Type of Policy

Not all policies will be the same. The type of policy you purchase and the benefits that are included with it will impact how much your premiums will be. The first factor here is the death benefit amount. This is the amount paid to your beneficiary. The higher the amount, the higher your premiums. Your premium will also depend on if you have a term or whole life policy. Term policies only last a certain amount of time. Longer terms will have higher premiums. Whole life policies will cover your whole life. These are also more likely to have higher premiums since they last the entirety of your life.

Since everyone leads different lives, not everyone will have the same life insurance premiums. Your specific circumstances will have a major impact on how much you’ll end up paying for these premiums. Now is the time to evaluate what factors will apply to you.

Read this next: How to Make Sure You Have Enough Money in Retirement

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