What affects the cost of life insurance

Life insurance premiums depend on how likely the insurer thinks you are to die during the coverage period, which comes down to your age, sex, health, tobacco use, job and hobbies, plus choices you make: the amount, the length of the term and the type of policy. Some of these you cannot change, such as your age and family history. Others you can, and a few can shift the price by a large multiple.

For the dollar picture see how much does life insurance cost?; this guide explains each factor and how much control you have over it.

Factors you cannot change

Age. The strongest driver. The Social Security Administration's 2023 period life table puts a 35-year-old man's chance of dying within 10 years at about 3.1% and a 50-year-old man's at 7.2%. Insurers price from this kind of curve, adjusted for insured lives. The premium is fixed at your age when you buy, so a 40-year-old's 20-year policy costs more than the same policy bought at 30. See what term life insurance costs by age and the cost of waiting to buy life insurance.

Sex. Women live longer on average. The SSA table shows life expectancy at birth of 75.79 years for men and 81.06 for women, so women usually pay less. See why women pay less for life insurance.

Family medical history. A parent or sibling who died young of heart disease or cancer can affect your class. See how family medical history affects life insurance.

Factors set by your health, some of which you can improve

Insurers sort applicants into rate classes, from preferred plus down to standard and substandard. Each step costs more. The inputs are:

• Build. Height and weight relative to the company's build chart.
• Blood pressure and cholesterol, measured at an exam or taken from medical records. Treated and controlled readings can still qualify for good classes; see life insurance with high blood pressure.
• Medical history and medications. Insurers can check prescription databases (how insurers check your prescription history) and the The MIB report: what insurers know about your history.
• Tobacco and nicotine. A tobacco class is normally priced well above a nonsmoker class, and insurers generally require a period of being tobacco-free before a nonsmoker rate. See life insurance for smokers, vaping, nicotine pouches and life insurance rates and how quitting smoking lowers life insurance rates.
• Alcohol, driving and criminal record. Serious violations and treatment history can raise rates or delay approval; see Life insurance after a DUI or alcohol treatment and how your driving record affects life insurance.

Where underwriting finds an elevated risk but not enough to decline, the insurer may add a table rating or flat extra, which raises the premium.

Occupation, hobbies and travel

Hazardous jobs such as logging or commercial fishing, and activities such as scuba diving, skydiving and private flying, can add a surcharge or an exclusion. See life insurance for high-risk jobs and scuba, skydiving, climbing and life insurance. Extended travel to certain countries can also affect an application.

Factors you choose

For the exam trade-off see no-medical-exam term life insurance: how it works and accelerated underwriting: approval without an exam.

How insurers' own costs show up

Beyond mortality risk, the premium covers sales commissions, administration, taxes, reserves and profit. It also reflects assumptions about how many policyholders will drop their coverage over time. Term policies are usually priced assuming a significant number of people lapse, especially when the level period ends. The Society of Actuaries' May 2021 study of post-level term experience found that between 27% and 96% of policyholders lapsed at that point, depending on the design (SOA report). Those assumptions are part of why prices differ between companies.

A checklist before you ask for quotes

1. Know your height, weight and recent blood pressure and cholesterol numbers.
2. List medications and diagnoses with dates; the questions on a life insurance application shows what you will be asked.
3. Answer tobacco and nicotine questions exactly, including occasional use.
4. Decide the amount and term first with the How much life insurance do I need?.
5. Request quotes in the same class and compare them on the life insurance quote comparison worksheet.
6. If a class falls short of what you expected, ask what would improve it, such as time since quitting tobacco or a controlled blood pressure reading.

Why two companies quote the same person differently

Each insurer has its own underwriting guidelines, reinsurance arrangements and target market. One company may accept a controlled blood pressure reading in its best class while another places the same person one class lower. One may price a 30-year term aggressively and another its 10-year term. This is why quotes from only one source can overstate what is available, and why a good independent agent or marketplace compares many. It also explains why the cheapest company for a friend may not be the cheapest for you; see how to find the cheapest term life insurance.

What does not usually affect the price

Your credit score is generally not an input in the way it is for auto insurance, although some insurers use credit-based data in underwriting; see do life insurers check your credit?. Your income affects how much coverage an insurer will approve, not the rate per $1,000.

Key takeaways

• Age is the largest driver and it is fixed on the day you buy, so waiting raises the price.
• Health, build and tobacco determine your rate class, and class differences can be large; tobacco is the factor most people can change over time.
• Term length, amount, riders and product type are choices that change the premium directly.
• Companies price the same applicant differently, so compare at least three quotes on identical terms.
• Answer health questions accurately; a quote based on an optimistic guess will change at underwriting.