How are Life Insurance Premiums Determined?

How do life insurance carriers determine how much they charge you in premiums for your life insurance policy?

When it comes to premiums for life insurance, insurers use the information they develop to determine your life expectancy - how long you are expected to live, and keep paying premiums for your life insurance.

There are several factors that insurers consider, including your age, gender, health, tip and amount of life insurance.

In addiiton, other important risk factors include your lifestyle, tobacco use, driving record, family health history, occupation, hobbies, etc.

The insurer uses your health information to select your health rating or classification and apply a specific rate per $1,000 of life insurance coverage to develop the premium you pay for your life insurance policy.

Learn more about how life insurance premiums are determined.

Will My Life Insurance Premiums Increase Over Time?

Whether or not your premiums will increase depends on whether you have term life insurance or permanent insurance.

With term life insurance coverage your premiums start out lower than comparable permanent life insurance coverage and stay fixed for the initial term (duration of your policy). If you choose to keep your term policy In Force past the initial term, the premiums will likely go up when you renew for another term.

With permanent life insurance policies, as long as you don’t let your life insurance coverage lapse, your insurance premiums are guaranteed not to increase for the rest of the owner’s life.

Here's how to compare term insurance versus permanent insurance.