How are Life Insurance Premiums Calculated?

Jan 12, 2021 | Insurance

Labrador Retriever

Life insurance rates are based on the probability of you surviving through the end of your term. The more likely you are to survive, the lower the rate and more likely you are to be approved. If you have health issues that put you at a higher likelihood of death, you are seen as a greater insurance risk. This will often result in higher rates or more difficulty in gaining approval for insurance.

There are several factors that are considered when a life insurance company evaluates an individual for coverage. There are people that believe they are in perfect health and will live forever. Perhaps you know of someone that feels this way?? The fact is that no one knows exactly when they will die. With this in mind, the job of a life insurance underwriter is to look at obvious factors such as your current health status but also to look at less obvious factors such as your family health history, any past medical issues, driving records, prescription report, previous bankruptcies, and criminal history.

Other factors that will affect rates & approval:

  • Height & Weight
  • Tobacco/ Nicotine Use
  • Prescription Meds
  • Alcohol Consumption
  • High-Risk Activities
  • High-Risk Jobs

Any activity or piece of your history that can be seen to put your health at risk, can affect your insurance rate and general insurability. That is why a healthy individual with a low-risk lifestyle will be the most insurable and find the most affordable life insurance if approved.

The life insurance underwriter will look at the information from your medical exam (if one was required). However, many life insurance policies DO NOT require medical exams if you are within their age limits and applying for a specific amount, which is normally under One Million of coverage for some of the carriers we represent. Being able to skip a medical exam will help speed up the underwriting process, allowing you to have coverage on a much faster turnaround basis. Underwriters will also look at information that has been listed on your application and information posted on the Medical Information Bureau along with the possibility of other 3rd parting consumer reporting. Your past medical visits may appear at the Medical Information Bureau so the underwriter will be able to see what you have gone to your Physician for in the past. The underwriter may find something on your MIB of interest and may order an APS from your Physician to find out details of a specific visit that you had. Health history of your parents and siblings may also be considered, as well as major driving or felony convictions may also be considered as well.

Our Final Thoughts:

Since every insurance company has their own individual underwriting guidelines, here at the Avanti Insurance Brokerage team, we feel very confident in our ability to help find the right life insurance coverage for you based on your unique situation. In the process of doing so, our goal is to help save you as much money as possible throughout the term of your policy by ensuring we select the right carrier & plan for you. Even if you feel you are not in the best health situation, please don’t feel discouraged – with all the trusted carriers we represent, there is a very high chance, we may still be able to find a solution for you!  

If you would like to schedule a free consultation, please call us toll-free at 1-833-4-AVANTI (282684), or simply click HERE to get started right away.

Thank you for considering us to help, we are confident you will be very pleased with our level of service.

-The Avanti Team

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13785 Research Blvd.
Suite 125
Austin, TX 78750

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