Life insurance policies pay out a large sum of money when an insured person dies. Therefore, if an applicant is statistically more likely to die sooner rather than later, the insurance company will require that applicant to pay higher rates. In contrast, people who are healthier than average will have cheaper life insurance rates.
Your health is the number one factor in determining the cost of a life insurance policy.
In This Article
Life insurance is all about risk. If you take good care of yourself, you’re less likely to be overweight or develop health issues. This means when you apply for life insurance, the insurance company sees you as low risk.
The lower your risk, the better your life insurance risk class—which means you pay less for a life insurance policy.
Gender and Longevity
All across the world, women statistically outlive men. This is due to both behavioral and biological factors. For example, men are more likely to smoke and more likely to take risks that make them susceptible to life-threatening injuries. These are behavioral factors. Scientists believe the estrogen that women produce helps combat heart disease. This is a biological factor.
Because women have reduced mortality risks compared to men, women pay less for life insurance on average.
Nutrition and Longevity
Your diet is a key component affecting longevity. If you eat fast food every day, it makes sense that your risk for heart disease is higher than that of someone who eats a Mediterranean diet.
If you aren’t the healthiest eater, it may impact your health. And, therefore, your life insurance rates.
Exercise and Longevity
Your doctor has likely asked about your exercise habits. An active lifestyle can significantly reduce the chances of chronic health conditions, mental health disorders, and premature death.
If you lead a sedentary lifestyle, your health will feel the consequences.
Life insurance companies review applicant medical records. Medical records will help the medical underwriters determine the risk to insure you.
Sleep and Longevity
The cumulative effects of sleep loss and sleep disorders represent an under-recognized public health problem.
Our sleep affects physical activity, nutrition, mental wellbeing, and substance use. Each of these, in turn, influences the amount and quality of our sleep. These factors also independently influence one another, creating an intricate web that supports or harms overall health.
Sleep apnea and insomnia are two of the most obvious sleep-related medical conditions that can affect your life insurance underwriting. But hypertension, diabetes, obesity, depression, heart attack, and stroke also can come into play.
See what you’d pay for life insurance
Your Lifestyle Choices Can Impact Your Life Insurance Rates
You make a choice to use tobacco or not. You make a choice to drink alcohol or not. You make a choice to use drugs or not.
These are examples of lifestyle choices that can have a drastic impact on your life insurance eligibility and the cost of a policy.
Tobacco Use and Life Insurance
Tobacco use affects your health. Life insurance companies balance the risk of insuring tobacco users by requiring higher premiums, referred to as smoker or tobacco rates.
John Smith is 30 years old. He applies for a 20-year $500,000 term life insurance policy.
If John was a healthy man who did not use tobacco products, his life insurance rate would be approximately $19.50 per month.
If John was a healthy man who smokes cigarettes, his life insurance rate would be approximately $68.80 per month.
The type of tobacco you use will affect what you pay. Not all tobacco products will receive a smoker rate. In addition, not all life insurance companies evaluate tobacco use in the same way.
» Learn more: Life Insurance for Smokers and Tobacco Users
Alcohol Use and Life Insurance
The occasional alcoholic drink will not impact your life insurance. However, a history of excessive alcohol use will result in higher life insurance rates or perhaps even denial of coverage.
When you apply for life insurance, the underwriter will use medical records (especially those related to treatment for substance abuse and psychiatric illness), social profile, motor vehicle reports, laboratory results, and physical findings in order to assess the risk associated with excessive alcohol consumption. A blood test can also sometimes be used in underwriting to identify those consuming excess alcohol.
» Learn more: Life Insurance and Alcohol Use: Buyer’s Guide
Drug Use and Life Insurance
Marijuana use is one of the most common lifestyle factors we see in applications.
Some life insurance companies evaluate marijuana use more harshly than others. If you use marijuana, don’t hide this information from your insurance professional. A good independent life insurance broker will be able to lead you to the company that will be most lenient with your marijuana use.
A history of substance abuse, however, is underwritten much differently than marijuana use. Anyone currently abusing a substance will be declined for life insurance coverage. But life insurance companies may consider applicants with a history of abuse, as long as the applicant had discontinued use for, typically, a minimum of two years.
» Learn more: Substance Abuse and Life Insurance
How Life Insurance Pricing Works
Your risk classification is ultimately what determines how much you pay for your life insurance policy. The insurance companies determine an applicant’s risk class during the underwriting process.
The higher the risk, the higher the premium.
During the underwriting process, insurance companies will evaluate your risk factors to determine how much of a risk you would be for them to take you on as a client.
Risk factors include:
- Your Age
- Your Gender
- Personal Medical History
- Personal Financial History
- Smoker Status
- Marijuana Use
- Your Family Medical History
- Prescription Record
- Motor Vehicle Record
- Your Job
- Any Risky Hobbies You Participate In
- Medical Exam Results
You can’t control all of these factors, like your biological sex or family’s medical history, but you are in control of your own destiny in regards to most of them, like your tobacco use and weight.
Improving your health can help you qualify for better life insurance rates.
How Medical Underwriting Works
Because life insurance is tied so closely to one’s mortality risk, insurance companies want to understand as much as possible about an applicant’s health before approving the insurance policy.
The insurer will examine the medical history, lifestyle, and other factors that relate to the individual’s medical needs, and, through actuarial analysis, make an estimate of the risk associated with providing coverage.
The Life Insurance Medical Exam
The results from a life insurance medical exam are reviewed during the medical underwriting process. The life insurance medical exam is one way insurance companies can evaluate an applicant’s most up-to-date medical status.
The medical exam is free and the examiner comes to your home or office, wherever is most convenient for you. It lasts 20-30 minutes and includes a blood draw, urine sample collection, and height and weight measurements.
Not everyone is required to get a medical exam when applying for life insurance.
» Learn more: Do I Need a Medical Exam to Get Life Insurance?
Pre-Existing Medical Conditions
You may think that if you have a pre-existing medical condition, such as depression or high cholesterol, that you can’t get life insurance. This isn’t accurate.
Life insurance isn’t just for healthy people. Every person is unique, just like the life insurance companies we work with.
Certain life insurance companies are more lenient with medical conditions than others. A good life insurance broker will be able to match you with the company that will offer you the best rates.
Types of Life Insurance
Term life insurance provides coverage for a specific period of time. This is the “term” of the policy. If the policyowner dies within the set term of coverage, their beneficiaries will receive a check from the life insurance company. Once the term is over the coverage terminates unless you convert or renew the policy.
A term life insurance policy can last anywhere from one year to 40 years with coverage amounts ranging from $50,000 to millions of dollars of life insurance coverage. For most people, term life insurance will be the best fit and most affordable option to make sure their family’s future is financially protected.
Permanent life insurance provides coverage for your entire life, as long as the premiums are paid. These policies are much more complex than term policies.
Many permanent life insurance policies have savings components which generate a cash value that you can borrow against as policy loans or withdraw from. Certain permanent policies also pay dividends to policyowners.
Because of the life-long coverage and savings component, permanent life insurance policies are typically 10-15 times more expensive than term life insurance policies.
Those with serious medical conditions may not be eligible for traditional term or permanent policies. But guaranteed issue life insurance may be an option.
Guaranteed issue life insurance is what it sounds like. You’re guaranteed approval even if you have a health condition.
These policies are often referred to as “last resort” life insurance because the applicant usually has already been denied traditional life insurance.
Because the insurance companies are taking on someone with poor health, the premiums for guaranteed issue life insurance can be quite steep. We recommend that you first try applying for traditional life insurance through a broker. If you keep getting declined, then look at guaranteed issue.
» Learn more: Is Guaranteed Issue Life Insurance a Good Option
If you have health concerns, work with a life insurance broker to find the most affordable coverage.
About the writer
Natasha Cornelius, CLU
Senior Editor and Licensed Life Insurance Expert
Natasha Cornelius, CLU, is a writer, editor, and life insurance researcher for Quotacy.com where her goal is to make life insurance more transparent and easier to understand. She has been in the life insurance industry since 2010 and has been writing about life insurance since 2014. Natasha earned her Chartered Life Underwriter designation in 2022. She is also co-host of Quotacy’s YouTube series. Connect with her on LinkedIn.