This is a guest post by Miranda Marquit.
One of the realities of insurance is that the premiums are set based on how much of a risk the company believes you are. When it comes to life insurance costs, companies look at the risk that you will die soon. In the case of term life insurance, the provider wants to gauge the likelihood that you will die before the term expires. With whole life policies, the insurance company wants to see that they collect enough in premiums (and the earnings from investing them over time) to offset the cost of paying a benefit upon your death.
As a result of this harsh reality, providers, when preparing online insurance quotes or in-person quotes, will want certain information.
Here are 5 things that can increase your life insurance costs:
- Your Work: What you do for a living can affect your life insurance costs. Indeed, as you probably have found, looking for life insurance can be difficult when you are in the military. A dangerous job can mean higher insurance rates.
- Your Health: Many life insurance companies require a blood test before finalizing a premium. If you have high cholesterol, or show some other health problem, you might have to pay a higher life insurance premium.
- Your Gender: Generally, women live longer than men. As a result, you could find yourself paying more if you are male. A life insurance policy generally charges higher premiums for men.
- Your Age: As you might expect, the older you are, the more expensive your life insurance policy is likely to be. Because of this, many personal finance experts recommend that you get life insurance coverage when you are younger. You are generally healthier, and the insurance company figures that you probably have longer to live.
- Type of Policy: The type of insurance policy you get matters as well. Because a term life policy ends after a set period of time, you are charged much less. On top of that, the shorter your policy is, the less you usually have to pay for term life insurance. This makes sense when you consider that the life insurance company only has to worry about your death for a set period of time. Whole life policies and universal life insurance costs more because you are insured indefinitely.
You will need to shop around for the best life insurance policy, looking for the best value, and doing what you can to reduce the life insurance costs.
Photo Credit: shutterstock
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