Factors that Determine Your Life Insurance Premium

When you are signing up for a life insurance policy, you understand that the rates that you will pay on a monthly basis for the insurance are set by complicated formulae and actuarial tables, and statistics - a whole process known collectively as "underwriting." But what statistics and data are they looking at? Well there is the obvious, of course, your age, your gender, your weight, your overall health and whether or not your smoke. Your family medical history may also be considered, along with any chronic conditions you have. Is that all that is considered, however? Not quite.

No Stone Unturned

Life insurance premiums are set by looking at literally hundreds or thousands of factors in your life, many of which you may not be aware of yourself. You will not have to fill out an application revealing most of this information to an insurance company but they will glean it and the results of each answer can nudge your insurance rates just a little higher or a little lower.

1. The number of children you have - Generally speaking, being married is a common factor in deciding insurance premiums - married people live longer and so pay less in premiums - but what part do children play? Again, it is a matter of longevity and it depends on what statistical data your insurance company uses, but families with children tend to live longer lives up to a point of diminishing returns (which usually begins around having 4 or 5 children).
2. How much insurance you already have - Those who already have a lot of life insurance will find that their insurance premiums are on an ever increasing slope for the new policies that they pick up. It makes the insurance companies skittish if you already have $2,000,000 in Texaslife insurance protection and you are seeking more while your yearly income may only be $40,000 per year. Naturally they're going to wonder why you feel you need so much insurance, but they aren't likely to ask or deny your request for a policy.
3. Foreign travel - Traveling to different countries posses certain health risks depending on where you are going. While traveling to Canada or Europe, isn't likely to have much of an effect on your Texas life insurance premiums, regular travel to Africa, Antarctica, South America or other places will certainly have an effect.
4. Income level - How does how much money you make have anything to do with longevity or life insurance? Well, not much, actually, this factor is in place as a stability measure, because the more you make, the less likely you are to end up not being able to maintain your policy by paying premiums.
5. Your hobbies - If you are interested in any dangerous hobbies such as skydiving or car racing your Texas life insurance premiums will suffer for it. By no means does this mean you should hide such hobbies when you are getting your insurance policy or conveniently "fail to mention them." Because if you are killed while doing one of these hobbies, the insurance company may well find it within their rights to reduce payment to your beneficiaries or not pay at all.