Often times, it can be hard for life insurance applicants to understand what goes into their quoted rates. Ultimately, however, those rates are based on algorithms designed to estimate the insured’s risk of dying within certain lengths of time. And while there are a number of different factors that go into these determinations, including generation, region, and even gender, the following seven factors are known to strongly influence quoted rates for clear reasons.
Height, Weight, and BMI
Obesity is strongly associated with a number of life-shortening conditions including coronary heart disease, high blood pressure, type 2 diabetes, and stroke. Therefore, Body Mass Index (BMI), a measure of an individual’s relative body fat, is a useful tool for insurance companies to get a pulse of how healthy an applicant is at present, and how likely they are to remain healthy in the future. This means that maintaining a healthy weight for your height may end up reducing your life insurance payments.
Smoking vs. Nonsmoking
According to the Center for Disease Control, smoking is estimated to increase the risk of coronary heart disease and stroke by 2 to 4 times. Lung cancer risk is increased by more than 25 times. This makes both daily and casual smoking a tremendous strike against an individual’s overall health and insurability.
The health histories of one’s immediate family members (parents, siblings) can reveal genetic predispositions shared by the insured party. A single immediate family member with a serious medical condition can be enough to trigger an increase in an individual’s quoted rate.
Occupation and Hobbies
Hobbies that involve a realistic chance or sudden death (base jumping, for example) are a surefire way to raise prices. The same goes for a risky day to day occupation like logging or mining. This can also boost prices as insurance companies adjust for the increased risk that comes with the requirements of certain industries.
Asthma can be a hard thing to live with, and while the risk of sudden death from an attack is typically very low, asthma can still be a factor that results in increased rates for certain applicants. In particular, one reason rates increase is because severe cases of asthma are often controlled with steroid treatments with harsh, sometimes dangerous side and long-term effects.
If an applicant has a history of substance abuse, including illegal drugs, pharmaceuticals, alcohol, or any other chemical-related arrests or medical interventions, it raises the possibility of future abuse and possible overdose or lifespan reduction in the future. This will result in dramatically increased rates or even outright rejection of the application.
Depression or Other Mental Health Concerns
Taking medication for chronic depression or other medical health challenges like schizophrenia increases the odds that an individual may die young, and drastically increases the chance of suicide among applicants. It’s important to note that while life insurance companies have the right to invalidate contracts in the case of suicide (typically for up to two years after the contract goes into effect), once this period ends death by suicide will still be covered by the policy.
Health Effects of Cigarette Smoking, Centers for Disease Control and Prevention