The Gerber Life Parenting Blog

What Determines Life Insurance Costs?

October 1, 2013

Couple Calculating Life Insurance CostWhether your existing life insurance policy no longer meets your needs or you are planning to purchase a policy for the first time, you may be wondering, “How much does life insurance cost?” Insurance premiums are determined by a number of factors that either increase or decrease your overall risk to the insurer.

According to the New York State Department of Financial Services, mortality statistics are a primary factor in determining rates. Common personal traits that may be associated with higher mortality rates typically result in a higher premium. Many risk factors are unchangeable, but some are within the control of the policyholder.

Life Insurance Rates by Age and Other Permanent Traits

Age is one of the primary factors in determining insurance premiums. Policyholders who are younger – let’s say age 25 – have a longer estimated life expectancy than someone 20 years their senior. The older an insured individual, the more likely he or she is to file a claim. Life insurance rates can also be affected by sex (women have longer life expectancies than men), as well as by the applicant’s history of personal or family health history.

Factors Within Your Control

Some risk factors that have a significant impact on life insurance costs also can be controllable and manageable by the insured. For example, insurers assess an applicant’s weight compared to his or her height, since this is a prime indicator of the potential for future health problems. Maintaining a healthy weight can result in significant savings over the life of a policy. Smoking, participating in hazardous activities and working in a hazardous occupation also are examples of manageable risk factors that could increase life insurance premiums.

Choosing a Policy

The cost of your life insurance will not only depend on your risk factors, but also on the policy you choose. Insurance policies with larger amounts of coverage also carry the highest rates. Likewise, insurers charge more to insure a customer for longer-term periods than for shorter terms. Whole life policies, for example, typically carry the highest premium rates, whereas a 10-year term life policy may have much lower premiums.

Gerber Life offers both term life and whole life insurance. Here are some of the key benefits of each:

Gerber Life Whole Life Plan1:
•    Adults ages 16 to 65 choose a coverage amount ranging from $25,000 to $150,000.
•    Builds guaranteed cash value, as long as your premiums are paid.
•    Locks in your rate for the life of your policy, so that your premiums don’t fluctuate with the ups and downs of the economy and stock market.

Gerber Life Term Life Plan2:
•    Provides a reliable way to help protect your family’s financial future.
•    Adults ages 18 to 70 select a coverage amount from $25,000 to $150,000, for a term of 10, 15, 20 or 30 years.
•    Your premium will never increase, during that initial term, regardless of the ups and downs of the economy or stock market.

Want to learn more? Visit our website for frequently asked questions about term life insurance and whole life insurance.


1Policy Form Series WLP-07
2Policy Form Series SLT-05

Please note: Articles and other information included on this website are intended for the general interest of our readers, and are not intended to express the positions or views of Gerber Life or to provide or constitute, legal, financial, health or other advice. Gerber Life makes no claims, representations, or warranties as to the accuracy, completeness, or appropriateness of this general interest information for your particular circumstances. If you need legal, financial, health or other services, you should contact a duly licensed professional.