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What Factors Determine Life Insurance Rates?

So you’re looking to pull the trigger and protect your families well being. You’ve researched the different types of life insurance, and have found the product that suits your needs, great! An important part of this research is figuring out your budget, and the cost of the insurance product, in order to make sure that it fits nicely into your budget. There are different factors that affect the price of your life insurance policy. The factors that determine your life insurance premium are:

The insureds age:

The younger you are, the cheaper your insurance premium. Buy young in order to lock in your insurability, and a great rate! Keep in mind, that insurance companies consider your age, as if you are a year older if your birthday is within 6 months.

The insureds sex:

Studies show that females live longer than males. As a result of actuarial calculations, insurance is cheaper if you’re female.

The insureds smoking habits:

Are you a smoker or a non smoker? As you may have figured out, if you’re a smoker, you will be getting penalized when applying for insurance. Smokers are rated when it comes time to insurance, meaning higher premiums for smokers.

The insured desired product:

Not all products are equal, you can get a basic term insurance product, being the most affordable form of life insurance, or you can get a permanent insurance product, being the most expensive. Each product serves their own purpose, and each product requires a different budget.

The insureds chosen face value:

The amount of the benefit / face value also affects your pocket book. As a general rule, the higher your coverage, the higher you pay. The exception to this rule, is as a result of banding. Insurance companies charge a certain amount per thousand of insurance. When you get to $250,000 of coverage, your cost per thousand decreases, your cost per thousand decreases once again when you reach $500,000, $750,000, $1,000,000, etc. this is what is referred to as banding. Therefore, it is possible that $500,000 of coverage, will be cheaper than $520,000 of coverage. These are the tricks of the trade, only one of many!

The insureds medical history / health:

Once insurance is applied for, the insurance company will ask medical questions, as well as take a look at your family medical history. Potential health problems can cause a potential increase in premiums. Sometimes, depending on your health, you can even be refused insurance coverage.

So many things to know, and Team Levine has you covered. Contact Team Levine today in order to setup your financial freedom.

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