Life insurance is one of the best ways you can protect your loved ones. However, understanding how premiums are calculated and what aspects of your application could raise or lower your rates can be confusing.

According to one survey, more than half of Americans viewed purchasing life insurance as “complicated.” We’re here to demystify the process. By learning how the following eight life insurance factors can affect your premiums, you can have a better handle on your options when comparing life insurance policies.

Cost Factor 1: Age 

Your date of birth is the No. 1 factor in determining your life insurance rate. Younger policyholders pay lower premiums. As you age, the likelihood an insurer will have to pay out on your policy increases, and therefore premiums increase.

Cost Factor 2: Gender

Women tend to live longer than men. In the United States, the average life expectancy for women is 86.7 and 84.3 for men. The disparity means that women generally pay less for life insurance than men do.

Cost Factor 3: Health History

Insurers may require a medical exam and access to your health records before issuing a policy. A history of health conditions, especially serious illnesses such as heart disease or cancer, will increase your premiums. Insurers will also look at your weight, cholesterol levels, blood pressure and other metrics that could indicate future health issues.

Cost Factor 4: Family Health History

Even if you have no current health issues, a family history of illness, especially hereditary diseases, could factor into your life insurance premium and increase the cost of your coverage.

Cost Factor 5: Smoking

The health risks associated with smoking, including potentially fatal diseases like cancer, mean increased premiums. If you’ve quit smoking since purchasing life insurance (congrats, by the way!), call your provider to see if your nonsmoker status will lower your rate.

Cost Factor 6: Hobbies

Do you spend weekends skydiving? Have a passion for racing cars? High-risk hobbies could lead to higher premiums, but exactly which activities fall into this category varies by insurer. It may pay to shop around for quotes.

Cost Factor 7: Occupation

Loggers and pilots are among the many professions often considered riskier than others. When you apply for life insurance, insurers will ask about your work. Your premiums could be higher if you have an occupation that exposes you to toxic chemicals or requires you to perform dangerous duties. 

Cost Factor 8: The Policy

The specifics of the life insurance policy you choose will also play a role in determining your premium. Policies issued for larger benefit amounts over longer terms generally cost more than policies with smaller benefit amounts over shorter periods. Whole or permanent life insurance policies tend to be more expensive than term life insurance policies.

Understanding the cost factors that go into life insurance premiums — and making changes such as losing weight, quitting smoking or adopting a healthy lifestyle to lower your blood pressure and cholesterol — can help you make smart decisions for picking the right policy at the right price.

We Can Help!

Our life insurance calculator helps you determine how much coverage you need. We offer three types of life insurance: term lifewhole life and universal life. Talk with your Farm Bureau agent to see which is right for you!