The Gerber Life Parenting Blog

What determines life insurance rates?

October 29, 2013

Senior Couple Bike RidingLife insurance rates are not “one-size-fits-all.” According to the New York Department of Financial Services, an assortment of factors can affect how much money will be paid for coverage. For example, a $500,000, 30-year Term Life policy could cost much less for a healthy, non-smoking 20-year-old than the same policy would cost for a 50-year-old smoker or someone who participates in high-risk sports.

Biological Factors

Biological factors may contribute to increased life insurance rates, as insurers perceive older ages and poor health histories as signs of increased risk for a claim. Women live longer, on average, than men, affording them lower insurance rates. Additionally, a family history of cardiovascular conditions, cancer, or other health complications can increase perceived risk.

Although little can be done to change biological factors, people can help influence their life insurance rates by maintaining a normal body weight, eating healthy   meals to lower their cholesterol, and exercising regularly to lower blood pressure.


Habits are important for determining life insurance rates. Almost all Term Life insurance applications will ask about an applicant’s occupation and hobbies to gauge a claims risk. Hazardous occupations and a history of excessive foreign travel can significantly raise premium rates, as can participation in such activities as skydiving, scuba diving and hang-gliding. An insurer may even pull someone’s driving record or credit report to help determine the life insurance rate amounts for that person.

Coverage Amounts

Lower coverage amounts with shorter durations cost less than larger coverage amounts with longer durations. The amount of coverage an applicant purchases should depend not only on cost, but also on the financial needs of his or her spouse and dependents. Certain stages in life may require increased coverage, such as a marriage, home purchase or the birth of a child. As nest eggs grow, debts are paid and children grow older, coverage needs may be lower, helping to balance the higher premium costs associated with aging.

To find out what your own life insurance policy may cost, get a free, customized quote from Gerber Life.

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