What Factors Affect Your Life Insurance Premiums?
Life happens, and on the flip side, so does end of life…It’s not a topic that most people enjoy talking about, but death is a fixed and unalterable part of life. So talking about it and preparing for it (getting a Life Insurance Policy) is a necessary part of our planning – planning that will take care of any remaining financial responsibilities and protect your loved ones from incurring your liabilities.
There are two primary types of life insurance:
- Whole Life – which, as long as your premiums are kept current, will last your whole life. This type of policy also has a cash value attached to it, that can build up, be borrowed against, can have cash withdrawn, and can be partially used for retirement. It costs more than term, but provides great benefits.
- Term Life – The lesser expensive of the two, is also the most commonly purchased. Protection from this type of insurance is typically 10-30 years, and can be renewed if the set number of years expires, if not renewed, your policy will expire also. Some term policies don’t require a physical exam, and some premiums my increase as you age.
Factors that affect your Life Insurance Premiums:
Although Life Insurance is extremely important to have, most of us want to keep our premiums as low as we can…so the smart thing to do is to be aware of the different factors that can increase the cost of your coverage:
- First and foremost is your age. Younger people have a longer life expectancy than do seniors. So it’s wise to purchase your insurance at a younger age, rather than older, because as your age goes up, unless they are fixed, so do premiums. Not to mention, it can be more difficult to get coverage when you’re older. And if you are buying Whole Life, you definitely want to get that when you are younger, your premiums will stay lower, and the cash value can have time to increase.
- How healthy you are also plays an important part in the cost of premiums, obviously, very healthy people with low risk medical situations will help keep premiums lower. Some of the health risks could include:
- If you are a smoker or have heavy alcohol consumption
- If you have pre-existing condtions
- If you have a family medical history that includes serious hereditary illness such as heart disease or cancer
- If you have high cholesterol, high blood pressure or diabetes
- If you are extremely overweight or obese
- What gender you are…typically women live longer than men, which means if you are female your premiums will probably be lower.
- Your lifestyle, believe it or not can have an impact:
- The type of activities or recreation you like to participate in such as sky diving, mountain climbing, motorcyle or car racing or any other high risk “fun”
- A poor driving record can have an affect
- Working a dangerous job such as a pilot, firefighter, police officer or if you work with or around toxic chemicals
What is your Life Insurance profile? Not sure? We would be happy to sit down and talk to you about your options.
If you are interested in getting more information on how to protect your family and replace your income in the event of death or disability, Contact one of the agents at Whitcomb Insurance Agency today!