Get Affordable Life Insurance!

Male Female

Get Affordable

Life Insurance!

Male Female

Risky Business: Paying for Life Insurance

Besides the type of policy you buy, there are a number of factors that life insurance companies consider when setting premium rates. Most depend on the risk you present that they will have to pay a death benefit. They include some of the following: Medical condition —the healthier you are, the lower your premiums. Age —the younger you are, the lower your premiums. Lifestyle choices —if you are a smoker, or engage in other habits that adversely affect your health, you will pay higher premiums. Weight —if you are overweight, your premiums will be higher than if you are in shape. Credit history —those with a good credit record are generally given lower premiums. Group membership —if you can buy as part of group like AARP, your premiums will be lower.

Apart from your age, there are some other factors that affect your premium which are beyond your control. Insurance companies invest the money they make from premiums in stocks, bonds, mortgages and other interest-bearing investments. How much they charge in premiums is, in part, based on how much money the insurers think they are going to make in interest each year.

Insurers also factor the cost of doing business into their premium rates. They estimate such expenses as salaries, agents' compensation and rent and charge enough to cover each policyholder's share of the expenses. This is known as "expense loading" and can vary from company to company depending on how efficiently it operates.

Once you're aware of how insurance companies set their rates, you can do many things to reduce your premiums and search for affordable life insurance that also protects your family and addresses your financial circumstances. Fortunately, this can be done comfortably and easily online from your home at sites like