9 Factors That Influence Life Insurance Rates and How to Get a Cheaper Quote

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Life insurance is an essential financial tool that provides a safety net for your loved ones if you pass away. But life insurance costs can be a bit tricky to figure out. Rates are influenced by numerous factors, including your age, gender and even your driving record. We’ll explain what key factors impact life insurance premiums and explore strategies to help you compare life insurance rates and secure the coverage you want — without breaking the bank.

What Factors Influence Life Insurance Rates?

Insurance companies are in a risky business — literally. Their job is to assess your mortality risk, that is how likely you are to die when your policy is in force.

Most factors that drive up life insurance rates are directly related to your mortality risk, such as your health, age and family medical history.

Other factors, such as the type of policy you buy and the coverage amount you choose, are totally within your control. As you compare life insurance rates, consider these influencing factors:

1. Age

Your age is perhaps the most influential factor in determining your life insurance premiums.

As you age, the likelihood of health issues and death increase, leading to higher premiums.

Many insurance experts say the most affordable age to buy life insurance is between the ages of 28 and 35.

Securing a life insurance policy at a younger age can result in significantly lower premiums, saving you money in the long run. Some companies may not sell you a new policy if you’re past a certain age, such as 85 and older.

Does life insurance for seniors make financial sense? Here’s how much you can expect to pay for coverage if you’re ages 65 or older.

2. Gender

Gender is another factor insurers look at when determining premiums.

Women tend to live longer than men, so women often pay lower premiums for the same coverage amount and policy type.

3. Health

Your overall health plays a major role in life insurance rates. Insurers will consider your height, weight, blood pressure, cholesterol levels and any pre-existing medical conditions when setting premiums.

Most insurers will require you to undergo medical underwriting prior to issuing you a policy. This usually involves a medical exam and/or completing a medical questionnaire. You may even need to undergo an EKG to check your heart.

Insurers can also view your medical records (with your permission) and see what medications you’ve taken by accessing prescription drug databases.

Applicants with excellent health profiles can secure lower premiums, while those with chronic health issues or high-risk conditions will face higher rates.

Making positive lifestyle changes — such as exercising regularly and maintaining a healthy weight — can improve your insurability and potentially reduce premiums.

More online companies are offering “no exam” policies, but expect lower coverage amounts and higher costs.


Using tobacco can increase your life insurance premiums by 30% or more. And we’re not just talking about smoking cigarettes either. Life insurance companies may also consider if you use nicotine gum, patches, e-cigs, vapes and even marijuana.

However, each insurance company is different.

“One thing many consumers don’t understand is that every life insurance company has its own set of guidelines and will view tobacco and marijuana usage differently,” said Matt Schmidt, a nationally licensed independent life insurance agent and CEO of Diabetes Life Solutions.

For example, a few companies will offer nonsmoker rates if you only use chewing tobacco or nicotine gum, Schmidt told The Penny Hoarder.

And when it comes to marijuana use?

“One carrier might rate you as a smoker if you smoke marijuana one to five times monthly while another carrier could care less,” Schmidt said.

“We’ve even seen some companies rate people who use marijuana edibles higher, whereas other companies didn’t mind the use of edibles and didn’t pass along higher rates to consumers,” he added.

If you’re tempted to lie about your smoking habits, just remember: If the insurance company finds out and you get caught, your policy could be canceled.

Instead, Schmidt suggests working with an independent agent who represents several insurance providers so they can help you find the best quote.

Knowing how to prepare for a life insurance medical exam can help you get the best rate.

4. Family Medical History

Does breast cancer run in the family? What about heart disease?

You might be young and healthy now, but life insurance companies want to know if your family medical history makes it most likely for you to develop life-threatening conditions later.

Insurers usually look at the health conditions and longevity of your immediate family members to assess your risk.

5. Criminal Record

While a minor offense may not have a significant impact, serious criminal charges or a history of substance abuse can result in higher life insurance premiums.

Insurers perceive these factors as indications of potential health risks or increased chances of an untimely death.

You might get rejected for life insurance if you’re awaiting trial, in jail or on parole. Your application may also get denied if you have major or multiple criminal convictions.

6. Driving Record

Your driving record can impact your life insurance premiums. It makes sense: Reckless driving habits suggest a higher likelihood of premature death due to car accidents. That’s a risky investment for a life insurance company.

Life insurance companies have access to lots of information, including your driving records. Insurers tend to focus on the last three to five years of your record.

Maintaining a clean driving record and practicing safe driving habits can help you secure more favorable life insurance rates.

7. Job and Hobbies

Expect higher life insurance rates if you work in a particularly dangerous industry or partake in a risky hobby.

Jobs such as law enforcement, mining and logging are considered high risk to insurance companies. Likewise, hobbies such as skydiving, scuba diving and race car driving will also push your rates higher.

8. Your Credit

If you’ve filed for bankruptcy in the last two to five years, it might be harder to obtain a life insurance policy, or you’ll pay more for coverage.

Some insurers may also look at your credit score when setting rates. A lower credit score may indicate a higher likelihood of missed premium payments or financial instability, leading to higher premiums.

Building a solid credit history and maintaining a good credit score can positively influence your life insurance rates.

9. Policy Type

The type of life insurance you buy has a direct impact on your monthly premiums, so pay attention when you compare life insurance rates.

There are two broad types of life insurance:

  1. Term life insurance: Lasts for a specified period, usually 10, 20 or 30 years. Cheaper than permanent life insurance.
  2. Permanent life insurance: Stays in force for your entire lifetime so long as premiums are paid. Often includes a cash value component you can borrow against. There are several different types of permanent life insurance, including whole life, universal life and variable universal life. These policies are more expensive than term life insurance.

Term life insurance tends to be more affordable because it provides coverage for a limited time. If you’re young and relatively healthy, you can often secure term life insurance for less than $35 a month.

To put things in perspective, a whole life insurance policy can cost five to 15 times more than a term life policy with the same coverage amount.

Unlike some other items on our list, you can control the type of life insurance you buy. If your main goal is to save money while providing financial protection for your loved ones, explore your term life insurance options.

Length of Policy

Policy length is also a key factor. As mentioned earlier, term life policies are cheaper than permanent policies because they only last a limited time.

Consider how long you really need coverage. When will your mortgage be paid off? How long until your kids move out?

Opting for a 10-year term policy instead of a 30-year term policy can help you save money on your insurance rate.

Coverage Amount

The size of the death benefit, or the money your beneficiaries receive if you pass away, is another important factor.

Naturally, the higher the coverage amount, the higher your premiums will be. A policy with a $100,000 death benefit will be cheaper than one with a $1 million death benefit.

So, if you’re looking to save money, you could consider opting for a lower coverage amount that still meets your needs.

How much life insurance do you need, anyway? Ask yourself these four questions to find out.

Tips for Securing a Better Life Insurance Rate

You may not be able to control all the factors that impact your life insurance premiums, but there are a few steps you can take to lower your rate as you compare life insurance rates.

  • Start early:  Getting a life insurance policy at a younger age can mean significantly lower premiums.
  • Prioritize your health: Maintain a healthy lifestyle, quit smoking, exercise regularly and manage chronic conditions to improve your insurability.
  • Go with term life insurance: It’s cheaper than permanent life insurance. By a lot.
  • Ask about discounts: Paying your premiums annually instead of monthly can sometimes net you a discount. Similarly, some insurance companies offer discounts if you purchase multiple policies from them and bundle your coverage.
  • Compare quotes: Get quotes from multiple companies to ensure you get the best possible rate.
  • Get professional help: Consult with an experienced independent insurance agent or financial advisor who can help you navigate the complexities of life insurance and find the most affordable options.

Rachel Christian is a Certified Educator in Personal Finance and a senior writer at The Penny Hoarder. She focuses on retirement, life insurance, taxes and investing.