We all know that life insurance is essential, but have you ever wondered what factors determine the premiums? Most people assume it’s based on their age and health. While those are undoubtedly important, many other considerations determine how much you’ll pay for your policy.
So, what are the factors that determine the premiums on your life insurance policy? Here’s some helpful information from Daniel Fabulic Insurance Agency.
Lifestyle:
Your premium may be affected by various factors, including your lifestyle choices. If you live an active lifestyle with many risky activities, you’ll likely pay more than someone who lives a relatively docile lifestyle. That’s because there’s a greater chance that you may die prematurely, and the insurance company will have to payout. For instance, smokers generally pay higher premiums than non-smokers.
Driving records, criminal records, past international travel, and your financial history all contribute to the cost of life insurance. Keep in mind that these factors are only relative; a single speeding violation isn’t going to cause you problems with life insurance. However, a pattern of reckless driving might.
Occupation and Hobbies:
If your job is dangerous, you’ll probably pay more for life insurance. That’s because there’s a greater chance that you’ll die while working. Occupations like logging, mining, and fishing are considered high-risk.
But it’s not just your job that determines your premium. Your hobbies can also have an impact. If you’re an adrenaline junkie who enjoys base jumping and rock climbing, your life insurance policy will be more expensive than someone who enjoys knitting and watching television.
Life insurance companies want to know everything about you to determine how likely you will die prematurely.
Family History:
What role does your family’s health history play in the cost of your life insurance? Insurance companies value family health history because it may provide insight into your own health’s future. Insurance providers use this data to help them determine whether or not you qualify and establish your rates.
Various factors influence these decisions in your family’s medical history. The following are some of the ailments that insurance companies check for:
- Cancer
- Diabetes
- Heart Disease
- High Blood Pressure
- Stroke
Each of these conditions might be hereditary, putting you at risk if a close family member has one of them. When evaluating your chances, insurance companies often look at your immediate family, such as your parents and siblings.
Height and Weight:
Believe it or not, how tall you are and how much you weigh play a role in your life insurance rates. These numbers are used to calculate your body mass index (BMI). Your BMI is determined by dividing your weight in kilograms by the square of your height in meters.
A BMI over 25 is considered overweight, while a BMI over 30 is obese. If you’re obese, you may have to pay up to 50% more for life insurance.
Conclusion:
You must keep in mind that you will likely qualify for a life insurance policy no matter what your case is.
Daniel Fabulic Insurance Agency is dedicated to providing clients with the best insurance services and affordable coverage in Shelbyville, KY.