What Can Cause High Life Insurance Premiums

What Can Cause High Life Insurance Premiums 

March 14, 2016

Some time ago, after the The Role of Insurance lesson in the Financial Peace University class we coordinated, a class member came up to me and said, "We looked for life insurance and didn't find the premiums Dave [Ramsey] was talking about." Believe it or not, I get that question a lot. So I thought I'd share with you the 6 categories that could cause your premiums to run high.

6 Categories

Sex and Age: It is a well known fact that women tend to naturally live longer than men do. So because of that, premiums tend to be higher for men. Age is a factor too. As you can see in the chart below. The older you get, the shorter your life expectancy is. That's really a no-brainier.               

                                                Ages        Male             Female

30           $13.93           $12.04

40           $19.09           $16.77

50           $36.47           $29.24

These monthly premium rates are based on a standard $100,000 20 year Term policy for a non-smoker. Before medical exam.

Health History - Yours/Family: What your current health is, has a big factor on what your premiums will be. Being over weight, having diabetes, high blood pressure, heart condition, cancer scare, etc... can all have a negative effect on your premiums. Even certain medications you're on are taken into account and can raise premiums, and rates can sometimes double because of your overall health. Your family's medical history is also taken into account. Any illness or diseases in your siblings, parents, or grandparents are looked at to see if the chances of you getting them are there. For instance, if your grandmother, dad (on the same side), and brother all died of cancer, the chances of you one day getting cancer too is greater than if there was only one or no cases of cancer in your family history.

Smoking: Is another big factor that we all know about. Even if you use the popular e-cigarettes these days, they can, and most likely, double the premiums you would have gotten if you didn't smoke at all. To give you an example, using the same numbers as above, the premiums for a 30 year old smoker are, Male: $25.03 and $21.24 for a Female. As you can see, there is a big difference.

Job or Career: This can be a factor too, because let's face it, some jobs are more dangerous than others. So depending on your occupation, your premiums may be higher.

Hobbies: Believe it or not, this is also a factor. Again, skydiving is far more dangerous than someone who paints, just to give you an example.

So there you have it. The 6 categories that could cause your life insurance premiums to be high. Now in all fairness, if you are planning to get life insurance, be TRUTHFUL when answering these kind of questions. Because if you were to die at age 50 from let's say a skydiving accident and you lied about that being your hobby since you were 18 years old just to get a lower premium, that could be a big factor on whether or not your beneficiaries get a lower death benefit check or if they get a check at all. So be truthful.