Life Insurance Rates

Just about everyone understands the importance of life insurance and the impact that it can have on your family, but while everyone knows it’s important, there are still millions of people that don’t have a plan. That could be one of the worst mistakes that you ever make for your family and loved ones.

If you’ve been avoiding life insurance coverage because of the cost, don’t worry. More than likely, there are several affordable options for insurance protection that fits your budget.

When shopping for a life insurance policy, the amount of coverage to be obtained is a pertinent factor. This coverage protection, however, will require a certain amount of premium rate to be charged. There are many sites that can quickly provide life insurance rates by age, but there is a lot more to what goes into the final rate than age alone.

How Life Insurance Rates are Determined

There are a number of different factors that go into determining the rate that a policy holder will pay for his or her life insurance policy. These typically will include:

  • Age – The age of an applicant will carry a great deal of weight in determining a life insurance premium. This is because a person’s life expectancy plays a very large part in how long they are likely to be paying premiums into the policy as versus when it is likely that the insurer will be required to pay out the death benefit claim. Rates for children, versus rates for seniors, vary greatly.
  • Health – An applicant’s health will also factor into what premium rate will be charged. This is because those who possess adverse health conditions – and especially those conditions that could potentially be fatal such as heart disease – are more likely to submit a claim. Therefore, this possibility is also factored into the premium amount that is charged. If the applicant needs to choose a no medical exam life insurance policy, this will also increase the premium.
  • Occupation – While it may seem strange to include one’s occupation into a life insurance rates calculation, this is actually a very important criteria. This is because there are some individuals who work in more dangerous occupations than others – and such jobs could make a potential death claim more likely. For example, a construction worker who regularly uses heavy equipment will typically be charged a higher rate for life insurance than someone who works in an office.
  • Activities – Participating in dangerous activities such as skydiving and bungee jumping can also force a higher rate to be charged over an applicant who spends time reading or writing as a hobby.
  • Tobacco or Nicotine Usage – If an applicant for life insurance coverage smokes – or even uses tobacco or nicotine in other forms – the premium rate that is charged will likely be higher than for an applicant who does not.
  • Amount of Coverage – Certainly, the amount of coverage that is being applied for will also be a determinant in the premium that will be charged. In this instance, a higher amount of coverage will generally require a higher amount of premium.
  • Length of Coverage – While permanent life insurance policies are typically purchased for one’s entire life – with premiums charged accordingly – term life insurance plans can have differing time frames, or “terms.” The length of these terms will also be a factor in the policy premium calculation.
  • Type of Policy – The type of policy being applied for will also factor into calculating the premium that is charged. This is because the policy may offer features other than just a death benefit. For example, because a portion of the premium on a whole life insurance policy goes towards funding the death benefit, while another portion goes into the policy’s cash value, these plans typically have a higher premium than a basic term life plan that provides only death benefit coverage.

Life Insurance Rate Classifications

When quoting the premium for a life insurance policy, an applicant will be placed into what is referred to as a “risk classification.” Obtaining life insurance rates by age only does not include all the factors that determine a person’s overall risk classification.

Compare Life Insurance Quotes from Multiple Companies
About You
Your Health

This means that, while the person was approved to obtain coverage, he or she may be considered more of a risk due to certain health conditions or other factors. Likewise, should a person be in extremely good health, they may be considered as “preferred” and will therefore be charged a lower rate than others who are more of a “standard” risk.

Typically, life insurance risk classifications may include:

  • Preferred – No Nicotine
  • Preferred – Nicotine
  • Standard – No Nicotine
  • Standard – Nicotine
  • Substandard

How Life Insurance Rates May Be Lowered

Even if a policy holder is initially charged a higher premium rate or placed into a substandard classification, there may be ways to lower future premiums. For example, if a person stops smoking or using nicotine for a certain length of time, he or she may be able to have their premium reassessed and ultimately lowered once they are considered a non-smoker.

In fact, quitting smoking is one of the best ways to get lower insurance premiums. As you can see, smokers get their own rating standards, and it’s going to be much more expensive than the other rating classes. In most cases, smokers are going to pay twice as much for life insurance, but with some companies, they could pay even more than that. If you’re looking to get the lowest premiums, you’ll need to cut out any tobacco usage.

Another way that you can get lower premiums is to improve your overall health. As we mentioned, your health is going to be a contributing factor in how much the insurance company charges you in premiums. The better your health, the less that you’ll pay for your protection. If you’ve started losing weight through a healthy diet and exercise, then it could save you money to have the insurance company redo the medical exam. If you were overweight during the medical exam, then you could pay 50% more for your life insurance coverage. Losing weight will save you hundreds of dollars every year.

Likewise, if a person was initially working in a more dangerous occupation when they applied for coverage but is now working in a safer environment, it is possible that the policy premium may also be lowered at a future date. If you think that you could get lower premiums on a plan that you currently hold, then you can contact your life insurance agent and they will recalculate your rates based on your new situation.

Obtaining Life Insurance Quotes

One can receive life insurance quotes in a number of different ways. For many years, in-person meetings with a licensed agent provided the best – and only – way to do so. Today, however, with the popularity of the Internet, there are numerous online quote engines that can offer the amount of premium to an individual once certain information such as state or zip code has been submitted.

Obtaining online life insurance quotes can save a great deal of time, and can also allow for an individual to quickly and easily compare quotes on differing policy types, as well as from several different life insurance carriers.

None of the life insurance carriers are the same in their definitions of rate class or underwriting guidelines.  This includes the carriers that are owned by the same parent company.

With so many carriers in the market space, you could spend weeks and weeks calling different companies and answering the same questions. Since we have contracts with many of the highly rated companies across the nation, your time will best be spent by working with one of our advisors and have them bring the quote comparison of all companies right to you.

Our lives are not guaranteed to last forever. So don’t leave behind debt and other final expenses for your family to be burden by. Today is the right time to get started on applications for life insurance policies!

As always, if you think of other questions you need answers to, please reach out to us so we can find the best plan for you money.


Susan Wright, CLU, ChFC, RHU, REBC, ADPA, CITRMS, CIPA has been in the insurance and financial field for over 27 years. Even with years of experience, she continues to create new resources for others. Everything from books to training material.

Susan received her MBA from St. Louis University and her BA from Michigan State University.

She has worked in several areas but excels in writing material for both finances and insurance. Her goal is to give professionals credibility and assist in streamlining the sales process.

She has written countless articles for a variety of websites.

This entry was posted in Life Insurance, Rates. Bookmark the permalink.

Compare Life Insurance Quotes from Multiple Companies
About You

Your Health