Term life insurance premiums are usually calculated based on several different factors, including the insured person's age, gender, health, smoking status, and coverage amount.
Age - Insurance companies typically use mortality tables to calculate life insurance premiums, and these tables take age into consideration because mortality rates increase with age. As an insured person gets older, the premiums they have to pay generally increase.
Gender - Statistical data shows that women typically have longer life expectancies than men, and this is why term life premiums can be lower for female insured individuals.
Health - Health is a critical factor when it comes to life insurance premiums. An applicant's health can affect the term life premium in two different ways. Firstly, insurers may conduct a medical exam and review the results to determine the insured person’s overall health and whether or not they are a high-risk applicant. Secondly, depending on the medical history of the insured person, the insurer may decide to either increase or decrease the term life premium.
Smoking - Insurers generally consider smokers to be a higher risk and therefore tend to charge them higher premiums.
Coverage Amount - The more coverage you need, the higher your premiums will be. When deciding on the coverage amount, it's important to consider your current and future financial needs.
At the end of the day, different insurers charge different premiums, so it's important to shop around to find the best term life insurance plan for your needs.
