October 6, 2022


Cost of life insurance
As you embark on the life insurance application process, it helps to be aware of the factors that affect cost.

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Life insurance and the financial protection it provides is something most financial advisors find valuable.

Many adults should have basic life insurance, and some should too supplementary policy. But it’s worth noting that not all life insurance policies are created equal – and some may cost more than others, depending on your personal circumstances.

If you don’t currently have a life insurance policy or simply want to improve the coverage you already have, you can start now by simply getting a quote. This is a great first step in determining how much you may have to pay.

As you embark on the application process, it helps to fully understand the factors that affect costs.

5 factors that affect life insurance rates

If you’re a working adult, spouse, or parent, you’ll probably benefit from it type of life insurance policy. Although millions of Americans would benefit from life insurance, that does not necessarily mean they will have the same experience or pay the same price. This is because the cost of life insurance varies from person to person and depends on a a wide range of factors such as:

  1. Age: This is obvious, but should not be ignored, even if you are older and healthy. A candidate who is younger is less likely to encounter health problems than an older one. So younger policyholders are a less risky bet, even if both groups are equally healthy. Consequently, the younger you are, the less you will have to pay. As you get older, the rate will increase.
  2. health: If you are sick, have a current medical condition or any pre-existing condition, you may pay more for life insurance than if you were fit without problems. This is especially true for smokers as the health problems they are prone to are well known, making them difficult to insure at a reasonable price.
  3. gender: It may seem unfair that one gender pays more, but, statistically, women live longer than men. Because men often (but not always) die at an earlier age than women, they can expect to pay more for their life insurance.
  4. Policy Type: Not all policies are created equal. Some offers cash options. Some don’t. Some insure you for a selected time frame, while others cover you for your entire life. Different policies have different costs. Understand the difference between whole life and term insurance. The type you choose (and qualify for) will affect your rate.
  5. Family medical history: Your genetics play an important role in getting life insurance. A history of cancer, heart disease or diabetes can be an indicator of your health. If you have a family history of any major health problems, that could be a deciding factor in how much you pay for life insurance.

Not sure how these factors may affect what rates you qualify for? You can easily view prices from multiple sources right now to see how much you would pay.

Other life insurance rate considerations

While the above five factors are some of the most important when trying to determine how much you will pay for life insurance, they are not the only considerations a company will take into account. Factors such as your occupation, driving record and personal lifestyle may also come into play. Anything considered risky is likely to lead to a higher rate.

Conversely, if these factors are insignificant, do not expect them to have a material impact on costs.

As mentioned above, life insurance is something that many adults should have, but the costs they pay to have it will vary significantly. Know what to expect before applying. Talk to a life insurance expert today and get a free price estimate.



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