There are many factors that impact the cost of life insurance. In this article, we will discuss all factors that impact the cost.
Life Insurance For Dads
If you’re thinking of taking out a life insurance policy, you might want to look at your current lifestyle and health status, as this will have an effect on the cost of your life insurance policy.
Life insurance providers consider a range of factors including age, lifestyle and health complications, and although some factors cannot be avoided, there are some lifestyle changes that you can make to lower the cost of your life insurance policy.
Below we’ll discuss the factors life insurance companies consider when giving you a quote.
Age
First of all, you need to be at least 18 in order to take out a life insurance policy. Some insurance companies supply policies for ages up to age 90.
Life insurance premiums also increase as we age, as the risk of dying increases the older we get. Age is said to be the most important factor insurance companies consider when providing life insurance quotes.
No matter what stage you are at in life though, a life insurance policy can provide financial security for those who depend on you.
Gender
Gender is said to be the second most determining factor insurance companies consider when providing life insurance policies. Consumer advocate groups have expressed resistance to this determining factor and want variables to be based on factors that applicants can control i.e. behaviour as opposed to gender.
Although insurance companies believe that gender is a sound factor to consider, statistics show that women tend to live around 5 years longer than men. Science suggests that this may be due to genetics, lifestyle and hormone levels.
Insurance companies may also apply different measures of health between genders. Things like blood pressure, cholesterol and BMI play a significant role in determining your current health status, which impacts the cost of a life insurance policy.
Men also tend to pay more for life insurance policies, based on assumptions that they partake in riskier behaviour, have high risk jobs, or that they are more likely to perform manual home tasks like climbing ladders, working on cars, cleaning gutters etc.
Occupation
Your occupation can play a determining factor in your new life insurance policy, as you spend a lot of time at your job and insurance companies need to know the risks associated within your line of work.
High risk jobs like security, firemen, boat workers, police officers, labouring, or any occupation that increases your risk of injury or death, will impact the cost of your life insurance policy.
Alcohol Habits
There are a range of health concerns that excess binge drinking can cause. These include: High blood pressure, heart disease, liver disease, weakened immune system, cancer, stroke, among many other increased health risks.
Life insurance providers need to know the level of your alcohol habits in order to assess the risks of any of these conditions. Alcoholism usually denies applicants a life insurance policy.
Smoker Status
Smoking comes with a wide range of increased health concerns, around 7/10 cases of lung cancer are a direct result of smoking. Other health conditions that are exacerbated by smoking include:
The health concerns that smoking causes are even more exhaustive than this list, but it is very evident that smokers counter more health problems and have shorter life spans. Life insurance companies need to know your smoking status as this will increase the likelihood of them having to pay out on a claim.
Health Conditions
It may come as no surprise that health conditions will play a significant role in determining the cost of your life insurance. It is also very important to make insurance companies aware of any pre-existing health conditions as this may affect an insurance payout if it was not disclosed beforehand.
Some of the health conditions that insurance companies are particularly concerned with include: Diabetes, Cancer, Heart complications, Respiratory issues like Asthma, Mental health concerns and Obesity.
There is some agency of control in lifestyle changes that you can implement, to avoid some of these health conditions. Things like a balanced diet and more exercise can reduce health concerns like heart complications and obesity.
Family Medical History
Insurance companies will inquire about your family medical history in order to determine the likelihood of you inheriting a similar health condition.
The cost of insurance premiums may increase if there is a high presence of a certain genetic medical condition within your family history.
Some of the genetic health conditions that insurance companies consider, but are not limited to, include:
Lifestyle
Your lifestyle, including your activities and hobbies may carry an increase of risky factors that insurance companies need to evaluate.
Insurance companies need to know if you are a frequent traveller as this may increase your risk of road accidents. They also need to know if you enjoy high-risk activities like snowboarding, rock climbing, speed boating, or skydiving- even riding a motorcycle needs to be disclosed. Certain hobbies can provide an adrenaline rush because you know it’s risky, and insurance companies know that it’s risky too!
Final Thoughts On Factors Which Make Life Insurance More Expensive
In conclusion there are many variables that insurance companies consider and they will impact your life insurance policy. With certain factors, you have no control over them, like your age, health conditions, gender and family medical history.
Other factors however, like your occupation, alcohol habits, smoker status and lifestyle, you do have control over. It may be worth focusing on your overall health and considering your lifestyle when thinking about purchasing a life insurance policy.
Life insurance companies will ask personal questions in order to gain the details they need to provide you with a suitable life insurance policy. It’s important to be honest when answering every question, as it may cause complications for insurance payouts if you havent been.
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