What Influences Life Insurance Premiums?

Valeriya Potapova/Dreamstime.com
min read
Updated: 06 November 2023
Written by
Insuranceopedia Staff
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Key Takeaways

  • Various factors affect life insurance premiums. By making the right changes, you may be able to lower yours.

Because there is a high degree of variability in life insurance premiums even among people in the same age groups, it’s easy to get the impression that insurance providers come to arbitrary decisions about what rate to offer their customers.

Insurers, however, base their rates on an insurance score, which means that age is neither the only nor the main component in their premium calculations. And the good news is that while you can’t change your age, you can take some steps to improving your insurance score.

While several of the factors that influence your score are beyond your control, there are some that you can address to lower your score and, consequently, lower your premium. This article will discuss some key features that influence your insurance score and how you can take steps to improve it.

Dissecting the Insurance Score

The insurance score is comprised of a myriad of factors that affect the likelihood of a policyholder’s beneficiaries filing a claim. These include age, gender, physical condition, personal habits, personal medical history, family medical history, and occupation. These combined factors are then offset against the possibility of defaulting on insurance premiums. Some insurance companies introduce other factors such as policyholder credit history, but we will limit the focus of this article to the base factors used by all insurers.


Gender may seem to be an odd consideration when calculating life insurance premiums, but global statistics show that women outlive men by an average of five years. This means that insurance providers are less likely to be able to collect premiums from men for a longer period. So, men pay higher insurance premiums than women of the same age for the same coverage.

Physical Condition

With regard to physical condition, insurance providers consider a variety of statistics. Most base their evaluation on the Body Mass Index (BMI), or the ratio of an individual’s weight to their height. People who register as overweight or obese on the BMI are charged higher premiums because these physical conditions are associated with a greater number of health risks.

Policyholders who are overweight commonly ask later in life why they are still paying a low premium. It is likely due to the fact that their BMI score was lower when their insurance provider last examined them. If they were to submit themselves to further examination or request an upgrade to the terms of their coverage, they would likely be charged a higher premium rate.

Personal Habits

Personal habits such as smoking, alcoholism, and substance abuse elevate the risk of premature death and, hence, increase the risk of insuring a policyholder with these habits. Insurance companies typically require full disclosure of such habits during the initial client interview.

It isn’t just addicts or risk takers who pay more for their insurance; the negligent pay higher premiums as well. Life insurance companies typically charge people who neglect their health through binge eating or lack of exercise significantly more for coverage.

Medical History

Insurance companies consider both personal and family medical history in computing an individual’s insurance score. Family medical history is relevant insofar as it may reveal the likelihood of a congenital disease that may have been transferred genetically but has so far remained largely undetected. Some people, then, are destined never to have favorable insurance rates. If you are born into a family with a history of heart disease and diabetes, you will always be given poorer rates than someone with the same health record but with less family history of hereditary conditions.

It might be tempting for applicants to lie about their medical history in the hopes of obtaining lower rates. However, openly disclosing any relevant details of your personal or family medical history is prudent, especially since insurers have teams of employees and legal representatives working to verify the information you provided in your initial interview.

Concealing material information, or material misrepresentation, is grounds for reducing or denying an insurance benefit, and there is no point in purchasing life insurance only to leave your beneficiaries unable to collect the death benefit because you concealed your medical history (find out How to Collect a Life Insurance Payout).


Aspiring policyholders whose work in professions that endanger their life, such as firemen, rescue workers, or seamen, have to pay higher premiums. The day-to-day risks involved in hazardous employment is a factor insurance providers are highly vigilant about. It’s not uncommon for life insurance policies to include a clause that mandates the policyholder to inform the provider of any change in occupation that will expose them to a greater risk of death.

This overarching clause aims to encapsulate all hazardous professions and ensure that the insurance provider has the opportunity to charge an additional premium if the risk of insuring the policyholder increases. As with medical history, failure to inform the insurance company may result in the invalidation of the policy.

Getting Your Insurance Score Reassessed

If you have been assessed with high insurance policy premiums, there is still hope. Many insurance companies have procedures for reassessment that simply involve subjecting yourself to the same set of tests given to new applicants. If the test results show that the risks present during your initial assessment are no longer present, many insurance companies will reduce your premium rate to maintain a good rapport with you and avoid losing your business to a rival company.

Keep in mind that life insurance policies are founded on trust. The insurance company’s rigorous assessments are merely a way of ensuring a long-term relationship with you and your family. Building trust with your insurance provider can reap rewards not only for yourself but also for your beneficiaries and descendants, who will have more favorable transactions with the insurance company.

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