Life Insurance by the Numbers – Factors Affecting Your Premiums

*Updated January 26th, 2026

Death is a part of life. While you can take your time and defer taking out life insurance now, this could change when you have other people depending on you financially. When the time comes to buy life insurance and purchase a life insurance policy, how much in premium payments will you be paying — and what impacts the cost of life insurance?

Your life insurance premium is a product of numerous factors affecting life insurance premiums that insurance companies review during underwriting. In other words, there are several factors that can affect your premium and ultimately impact the cost. Below are the key risk factors and underwriting considerations that determine whether you’ll pay a higher or lower life insurance cost as the policy owner and insured person.

Life Insurance: Policy Owner vs Insured Person vs Beneficiary

When you buy life insurance (or any other insurance policy), you are the policy owner. In most cases, the policy owner is also the insured person who is covered by the insurance policy, though it’s possible for these to be different.

In case of your death as the insured person, the insurer will provide a payout (typically a lump sum or an annuity) to your beneficiaries.

These beneficiaries can be your parents, spouse, or children as you designate them. You can also name a lender or a bank as your beneficiary with the policy serving as collateral to the loan. But this setup can be complicated and requires further examination.

It is possible to take an insurance policy for another person’s life, your spouse for example. But you need to have an insurable interest in the person — meaning their untimely demise would result in an economic loss on your end.

Otherwise, you must pass insurability before you can be given coverage. This is basically your level of being insurable, whether the insurer can take the risk of insuring your life in exchange for a premium.

Life Insurance Underwriting: Mortality and Death

Not everyone is insurable although insurers vary, as what is insurable to one may be deemed uninsurable to the other. If a carrier insures someone with high risk factors, the life insurance premium is often higher than standard, and you may pay more for life insurance overall.

Insurance companies don’t want someone whose lifestyle or health status puts them at a higher risk of death, which triggers the benefit payout before the policy accumulates value. Since life insurance rates are determined largely by mortality risk and life expectancy, anything that points to a shorter life expectancy can lead to higher premiums.

Factors Affecting Life Insurance Premiums

Against this backdrop, here are the main factors affecting life insurance pricing that carriers look into when they calculate life insurance premiums. These factors that impact the cost can help in determining whether your life insurance premium is going to be higher or lower.

Your age 

Your age definitely matters in life insurance policies. The higher this number, the higher your premium will be. Why? While death can happen to anyone, those who are older are statistically more likely to pass sooner, which could affect underwriting outcomes.

When you get life insurance at a younger age, you can continue paying into your term life insurance policy for more years, which can reduce what you pay over time. This is why the younger you are, the better your life insurance rate tends to be — and it can help you qualify for a lower rate.

This also explains why some life insurance companies don’t accept applicants at 65 and older.

Your gender

Women generally outlive men by almost five years according to the Centers for Disease Control and Prevention. That longer life expectancy (and longer life expectancy overall) typically results in lower insurance rates for comparable coverage.

For the same coverage amount, a woman will often pay less for life insurance than a man because the insurer expects a longer life on average.

Your medical history (personal and family)

It’s standard for underwriters to pull your medical records to look for hospitalization history, health condition indicators, and overall health status.

Their probe can extend to your family history, since some life-threatening diseases can be genetic, such as cancer, diabetes, and cardiovascular ailments.

Insurance companies look for anything that could shorten your lifespan. When underwriters identify higher medical risk, it can impact your premiums and may result in a higher premium.

Notably, smoking and heavy drinking are a big factor affecting pricing. They increase health risk and often result in higher life insurance rates.

Your current physical condition

Your Body Mass Index (BMI) is the ratio of your weight and your height, used to screen your physical condition.

If your BMI is within the normal range set by the insurer, your life insurance premium could be lower. If your BMI strays from the norm, it may signal future health problems, which can impact the cost of life insurance and lead to higher life insurance pricing.

Your driving history

How careful you are as a driver can affect life insurance premiums as well. Insurance companies can review driving records over the last three to five years.

Violations can be taken into consideration and reflected in your premium, since risky driving can be viewed as a mortality risk.

Your occupation and lifestyle

What do you do for a living? Does it entail putting your life on the line? How about your after-work activities?

High-risk jobs and hobbies can be a major risk factor. If you are literally living on the edge, you could be in for higher life insurance pricing than most people with desk jobs and far less risky activities — and you may typically pay higher premiums.

Your policy 

Your policy choice matters. The benefits, riders, and the term itself are just some of the details that make coverage expensive or cost-effective.

A key pricing driver is the type of life insurance you choose. For example, term life insurance usually costs less than permanent life insurance, and whole life insurance often costs more because it includes lifelong coverage and a cash value component. These are different types of life insurance and they can significantly influence the cost.

The insurer’s rates and costs (administrative and sales expenses) are also included in the computation of life insurance premiums, and these can impact life insurance premiums from one carrier to another.

If you want a clearer picture of your life insurance per month, you can request a life insurance quote to see how these factors that impact pricing show up in real numbers. It’s often smart to get a life insurance quote from multiple carriers when shopping for life insurance.