Home » What Factors Determine the Cost of Life Insurance Premiums?
June 28, 2023

What Factors Determine the Cost of Life Insurance Premiums?

Life insurance can play a pivotal role in financial planning. It aims to help provide for your loved ones after you pass away. Generally, in exchange for paying a monthly, quarterly or annual premium, a life insurance policy pays out a death benefit to one or more named beneficiaries when the insured person dies.Life Insurance

Like most insurance policies, life insurance premiums vary based on the insured and the insurer. The following are a few of the factors an insurance provider may consider when determining the cost of a life insurance premium:

  • Age—A person’s age is a significant factor. Typically, younger policyholders pay lower premiums than older ones.
  • Gender—Life insurance policies tend to be lower for female policyholders because they have a longer life expectancy than their male counterparts.
  • Health—Life insurance providers will most likely require a medical exam and access to your medical records from up to the past 10 years. If you have a preexisting condition, you may pay a higher premium than someone with a clean health history.
  • Family medical history—Life insurance providers may also look at your family’s medical history to see if there are any patterns of severe illness or hereditary disease.
  • Lifestyle—If you regularly participate in activities considered risky or unhealthy, such as skydiving, mountain climbing, smoking or heavy drinking, you may experience higher premiums.
  • Occupation—If your profession is considered dangerous, such as being a police officer, farmer, construction worker or miner, your policy may be more expensive because these jobs could harm your health.
  • Policy type—The following are the two main types of life insurance and how their cost varies.
    • Term life insurance may provide a death benefit for a specified time, typically 10, 20 or 30 years. The death benefit will only be paid to the beneficiary if the insured dies within the policy term. Term life insurance is generally the most affordable time of life insurance.
    • Whole life insurance may provide a death benefit for the insured’s entire lifetime. It typically also includes a savings component that builds up cash value over time. The policyholder may be able to borrow against the cash value or use it to pay premiums. Whole life insurance typically has the highest premium of any life insurance policy.

These are just a few of the most common factors insurers may consider. To get an accurate quote, contact FLM Insurance. We can help determine which type of coverage suits your particular needs.


This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.

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