Health – Your current and past health is one of the biggest determinants of life insurance rates. Insurance companies will assess your health risks based on information provided during the medical screening and application process. Things like your medical history, any pre-existing conditions, your weight, tobacco use, and participation in hazardous activities can all influence rates. Generally speaking, the healthier your lifestyle choices, the lower your rates will likely be.

Age – Life insurance premiums tend to be cheaper when purchased at a younger age. As you get older, the risks of death increase statistically each year, so rates will rise accordingly. Being older often means higher rates since there is less time left for the insurance company to earn profits from your policy before having a greater chance of paying out the death benefit.

Policy Amount – Not surprisingly, the greater the death benefit amount you request, the more expensive your premiums will tend to be. A $500,000 policy will cost significantly more than a $100,000 policy, for example, since there is more financial liability for the insurance company if they have to pay out a $500,000 death benefit.

Policy Term Length – Term life insurance, which provides coverage for a pre-determined period of time like 10-30 years, usually has lower premiums than permanent or whole life insurance that covers you for your entire life. Within these categories, longer term lengths will usually carry higher rates than shorter terms. For a 20-year term policy, a 50-year-old client will pay less than for a 30-year term, as their policy would expire before reaching an advanced older age.

Marital Status – Married people may qualify for lower rates than singles for life insurance since married individuals tend to have greater financial obligations and dependency upon their income that life insurance helps protect, like a spouse and children. Significant health or risk factor differences between spouses could diminish this benefit.

Gender – Women tend to have lower life insurance premiums than men of the same age since female mortality rates are statistically lower. This gender rating difference has narrowed in recent decades as gender life expectancies have converged some but does still affect pricing to a degree.

Occupation – Dangerous occupations that carry materially higher accident or mortality risks can lead to higher rates. Examples include certain jobs in construction, firefighting, mining, police or military work, commercial aviation, and more hands-on roles in manufacturing or industrial settings where serious workplace injuries are more prevalent. Sedentary white-collar jobs do not come with as high of an occupational risk premium.

Driving Record – A history of speeding tickets, accidents, or license suspensions from drunk/reckless driving may cause a small increase in premiums compared to clients with clean driving records. This shows a willingness to take on greater risks with safety. The impact is minor for life insurance versus larger impacts on auto insurance rates.

Income – High-income individuals may pay more for life insurance since the death benefit amounts needed to adequately replace their substantial earnings are larger and pose greater financial liability for the insurer. This can affect pricing somewhat. Health is still the primary underwriting consideration regardless of income level.

Optional Riders – Any additional benefit riders selected with a policy like chronic illness or long-term care riders can increase the premium cost above what a standard policy alone would be. These add additional coverage and risks that insurers price accordingly.

Underwriting Class – Through medical evaluations, blood tests, medical exams, and other screening tools, insurers will place applicants into standardized risk classes that significantly dictate rates. Lower-risk preferred classes have lower rates while higher-risk classes, including those with health issues that place them in a pari-mutuel or rated class, pay higher premiums commensurate with their increased risks.

State of Residence – Life insurance rates can vary somewhat between states based on regional economic indicators, state insurance regulations, and available competition among carriers in each local market. Ultra-competitive markets like California often see lower average rates than less competitive state environments. The application of certain state-specific laws may impact rates too.

Carrier Selected – Each life insurer has its own proprietary underwriting guidelines and pricing models. Two identical applications could receive different rates from various carriers based on how they each independently assess and price the associated risks. Comparing quotes across multiple top-rated insurers identifies the most competitive options.

This covers some of the important financial and health-related rating factors that life insurance companies use to develop customized premiums based on an individual applicant’s unique circumstances and risk profile. Favorable characteristics in these areas can potentially provide opportunities for lower rates and premium savings. Obtaining quotes and applying through licensed advisors helps navigate the process optimally.