Life insurance protects your family’s financial security for when you’re gone. In exchange, you’re responsible for paying a monthly premium.
Insurance companies use plenty of factors to determine how much you’ll pay for your life insurance policy. Here are the four categories to expect and get an idea of your personal cost.
#1: Type of Policy
When you get a life insurance policy, you have options—multiple types of policies exist to best meet your coverage needs. No two policies are exactly alike, and many policies offer further options to customize your coverage. Types of policies include:
- Whole life insurance
- Universal life insurance
- Term life insurance
- Final expense insurance
The next important cost-contributing factor is age. The older you are, the more you cost to insure.
It’s important to keep in mind that age affects your costs differently depending on your policy. For all policies, the older you are at sign-up, the higher your premium. Some policies also have a premium that is guaranteed not to increase as you get older. Others increase anywhere from 5% to 10%.
Health also plays a large role in your life insurance costs, but, once again, it depends on your policy. For instance, you can’t even get whole, universal, or term life insurance if you have a pre-existing or terminal condition, but you can get a final expense policy. On the other hand, if you’re younger and in good health, you’ll likely choose a whole, universal, or term life policy over final expense.
For whole, universal, and term life, your qualifying medical exam determines your eligibility and your cost. You must visit a doctor and provide the results to your insurance plan to qualify. If the doctor finds, for instance, that you have a history of health conditions such as cancer or high blood pressure, you’ll pay more for your policy.
#4: Personal Factors
Finally, there are a number of personal, miscellaneous factors that influence your life insurance costs as well. For instance, men pay more than women because their average lifespan is shorter.
Tobacco use also means higher premiums due to the number of health issues it produces. And, if you take up risky hobbies like skydiving or work in a dangerous industry like logging, your premium will be adjusted accordingly. Even your driving and credit records play a factor.
Find Your Best Life Insurance Premium with All Things Insurance
Understanding your life insurance costs is easier with experts who take the time to understand you. To learn more, call All Things Insurance at (763) 645-5450.